LIVE MARKETS-US stocks dip as Middle East tensions, chart resistance add more wrinkles

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U.S. STOCKS DIP AS MIDDLE EAST TENSIONS, CHART RESISTANCE ADD MORE WRINKLES

The S&P 500 index .SPX and Nasdaq composite .IXIC ended lower on Wednesday with investors spooked by Middle East tensions, while a tame inflation report appeared to calm concerns around tariff-driven price pressures, and traders awaited more details on China-U.S. trade talks.

A day after officials from Washington and Beijing agreed on a framework to put their tariff truce back on track, President Donald Trump said the U.S. deal with China was done.

However, the S&P 500 index erased modest gains after a U.S. source said the U.S. embassy in Iraq was preparing for evacuation due to heightened security risks in the region. A senior Iranian official said earlier that Tehran will strike U.S. bases in the region if nuclear negotiations fail and conflict arises with the United States.

A majority of S&P 500 sectors finished red, with consumer discretionary .SPLRCD and materials .SPLRCM, both off around 1%, taking the biggest hits.

Perhaps not surprisingly, given a more than 4% jump in NYMEX crude futures CLc1 on the Middle East supply risks, and the U.S.-China trade deal, energy .SPNY, up about 1.5%, led gainers.

Under the surface, gold XAU=, and gold stocks .HUI, were only able to post modest gains.

It was the first decline in four sessions for the S&P 500 and the Nasdaq composite. At the day's early highs, the SPX came within 1.5% of its record close, while the IXIC was within 2% of its record finish.

In the end, the declines in the Nasdaq and SPX were relatively contained, and the Dow .DJI essentially finished flat.

That said, traders are taking note that the dip in the composite came after the tech-laden index hit its intraday high of 19,800.45, which put it right up against the resistance line from its December intraday peak.

So far, this line has prevailed, but traders will be keeping a close eye on the composite, which finished at 19,615.88, to see whether it can quickly regroup and successfully overwhelm it, in order to continue what has been a powerful advance.

Of note, the NYSE FANG index .NYFANG, which provides exposure to 10 of the day's highly traded tech giants including all of the Mag 7 stocks except Tesla TSLA.O, scored a fresh record close.

In terms of data due before market open on Thursday, initial jobless claims are expected at 240k vs 247k last week. May producer prices month-over-month are expected to have risen 0.2% vs -0.5% last month. The year-over-year print is expected at 2.6% vs 2.4% last month.

Here is a snapshot of where markets stood just shortly after 4 p.m. EDT:

(Terence Gabriel)

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