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U.S. stocks ended lower on Wednesday, retreating from their record highs, as fresh tensions in the Middle East dented investors’ confidence and a surge in global oil prices reignited fears of inflation ticking higher. All three major indexes ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plunged 1.2%, or 620.72 points, to finish at 50,687.07 points.
The S&P 500 declined 0.7%, or 56.06 points, to close at 7,553.72 points. Communication services and financial stocks were the worst performers.
The Communication Services Select Sector SPDR (XLC) fell 1.3%. The Financials Select Sector SPDR (XLF) lost 0.6%. Seven of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.9%, or 239.92 points, to end at 26,853.98 points.
The fear gauge, CBOE Volatility Index (VIX), was up 1.84% to 16.06. Decliners outnumbered advancers on the NYSE by a 3.04-to-1 ratio. On the Nasdaq, a 2.59-1 ratio favored declining issues. A total of 19.81 billion shares were traded on Wednesday, lower than the last 20-session average of 20.12 billion.
On the Nasdaq, there were 90 new highs and 137 new lows. On the S&P 500, there were 33 new 52-week highs and 19 new lows.
Middle East Tensions Continue, Oil Prices Surge
Oil prices surged on Wednesday as Middle East tensions grew after the United States and Iran exchanged airstrikes. Following the airstrikes, President Donald Trump said that Iran has agreed to discontinue their nuclear weapons program, but “they can change their mind.”
West Texas Intermediate futures jumped 2.41% to settle at $96.02 per barrel after this. A day earlier, Kuwait said that its air defense systems were intercepting hostile targets, suggesting that the conflict in the Middle East is far from over.
Concerns grew that a surge in oil prices owing to the ongoing Iran war could lift inflation higher. Treasury yields also jumped following this. The 10-year Treasury yield rose to nearly 4.5%.
Markets are now pricing in a 41.1% chance of the Federal Reserve hiking interest rates by a quarter percentage point by the end of this year, according to the CME FedWatch Tool.
Private payrolls increased more than expected in May. According to the ADP ((ADP - Free Report) ) national employment report, the U.S. economy added 122,000 new private jobs in May, surpassing the consensus estimate of 117,000 jobs.
A separate report showed that the Institute for Supply Management’s non-manufacturing purchasing managers index jumped to 54.5 in May from 53.6 in the prior month.
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Stock Market News for Jun 4, 2026
U.S. stocks ended lower on Wednesday, retreating from their record highs, as fresh tensions in the Middle East dented investors’ confidence and a surge in global oil prices reignited fears of inflation ticking higher. All three major indexes ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plunged 1.2%, or 620.72 points, to finish at 50,687.07 points.
The S&P 500 declined 0.7%, or 56.06 points, to close at 7,553.72 points. Communication services and financial stocks were the worst performers.
The Communication Services Select Sector SPDR (XLC) fell 1.3%. The Financials Select Sector SPDR (XLF) lost 0.6%. Seven of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.9%, or 239.92 points, to end at 26,853.98 points.
The fear gauge, CBOE Volatility Index (VIX), was up 1.84% to 16.06. Decliners outnumbered advancers on the NYSE by a 3.04-to-1 ratio. On the Nasdaq, a 2.59-1 ratio favored declining issues. A total of 19.81 billion shares were traded on Wednesday, lower than the last 20-session average of 20.12 billion.
On the Nasdaq, there were 90 new highs and 137 new lows. On the S&P 500, there were 33 new 52-week highs and 19 new lows.
Middle East Tensions Continue, Oil Prices Surge
Oil prices surged on Wednesday as Middle East tensions grew after the United States and Iran exchanged airstrikes. Following the airstrikes, President Donald Trump said that Iran has agreed to discontinue their nuclear weapons program, but “they can change their mind.”
West Texas Intermediate futures jumped 2.41% to settle at $96.02 per barrel after this. A day earlier, Kuwait said that its air defense systems were intercepting hostile targets, suggesting that the conflict in the Middle East is far from over.
Concerns grew that a surge in oil prices owing to the ongoing Iran war could lift inflation higher. Treasury yields also jumped following this. The 10-year Treasury yield rose to nearly 4.5%.
Markets are now pricing in a 41.1% chance of the Federal Reserve hiking interest rates by a quarter percentage point by the end of this year, according to the CME FedWatch Tool.
Also, a decline in artificial intelligence stocks weighed on the broader market. Shares of Oracle Corporation ((ORCL - Free Report) ) plunged 5.8%, while NVIDIA Corporation ((NVDA - Free Report) ) declined 3.6%. Oracle has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
Private payrolls increased more than expected in May. According to the ADP ((ADP - Free Report) ) national employment report, the U.S. economy added 122,000 new private jobs in May, surpassing the consensus estimate of 117,000 jobs.
A separate report showed that the Institute for Supply Management’s non-manufacturing purchasing managers index jumped to 54.5 in May from 53.6 in the prior month.