Stocks Fall on War and Credit Worries as Oil Rises

Aaron Kennon, Co-Founder & CEO at Clear Harbor Asset Management, examines the convergence of geopolitical turmoil and domestic political pressure on the markets.

A renewed oil advance stoked fears the war in Iran will exacerbate a global energy crunch, spurring a drop in stocks, which also came under pressure amid anxiety surrounding the private-credit industry.

Without any signs the conflict in the Middle East is abating, the S&P 500 extended this month’s decline. Alternative asset managers fell as Apollo Global Management Inc. and Ares Management Corp. became the latest firms to curb withdrawals from some of their private-credit funds. Brent topped $103. Gold was set for a 10th straight day of losses. Treasury yields and the dollar rose.

Fighting between the US-Israeli alliance and Iran raged unabated, even as President Donald Trump claimed talks are under way to end the conflict. Iran has started charging transit fees on some commercial vessels passing through the Strait of Hormuz, another sign of Tehran’s control over the world’s most important maritime energy channel.

“It all comes down to the re-opening the Strait of Hormuz,” said Matt Maley at Miller Tabak. “So, if we hear that ‘good progress is being made’ in the negotiations at the end of this week, it won’t be enough, if the Strait remains very restricted.”

Maley also notes that the issues facing the private-credit market are not receding, so brushing these problems aside is not a good idea.

“Thus, the risk/reward equation in the marketplace right now is still decidedly weighted towards risk,” he added.

Asset managers have been hit with a wave of redemption requests amid growing anxiety around the $1.8 trillion private-credit market’s lending practices and exposure to businesses that are vulnerable to artificial-intelligence disruption.  Wall Street traders grappling with a range of possible outcomes for the war in the Middle East drove stocks away from session lows amid hopes for talks to end a conflict that keeps dragging on. Oil climbed.

The S&P 500 was little changed after falling about 1%. An Iranian source told CNN there had been “outreach” between Washington and Tehran, with Iran willing to listen to “sustainable” proposals. Brent topped $104. Software firms dropped as a report that Amazon Web Services is developing new AI tools added to concern over reduced demand for legacy products.

Stocks waver as oil rises.

Gold halted nine straight days of losses. Treasury yields and the dollar rose.

“Markets remain firmly at the mercy of geopolitical headlines,” said Fawad Razaqzada at Forex.com. “Traders are hanging on any signals around whether ceasefire talks are even remotely on the table. Until there’s something concrete, it’s hard to see risk appetite improving in any meaningful way.”

Israeli officials said the country will persist with strikes against Iran even as President Donald Trump claimed talks are underway. Iran’s biggest Gulf Arab neighbors are considering joining the war, and could be pushed to if Tehran attacks their critical infrastructure, according to several people with knowledge of the situation.

Iran has started charging transit fees on some commercial vessels passing through the Strait of Hormuz, another sign of Tehran’s control over the world’s most important maritime energy channel.

“It all comes down to the re-opening the Strait of Hormuz,” said Matt Maley at Miller Tabak. “So, if we hear that ‘good progress is being made’ in the negotiations at the end of this week, it won’t be enough, if the Strait remains very restricted.”

Aside from the geopolitical risks, Maley also noted that the issues facing the private-credit market are not receding, so brushing these problems aside “is not a good idea.”

Alternative asset managers fell as Apollo Global Management Inc. and Ares Management Corp. became the latest to curb withdrawals from private-credit funds. The industry has been hit with a wave of redemption requests amid growing anxiety around lending practices and exposure to businesses that are vulnerable to artificial-intelligence disruption.

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