Wall Street remained down on Tuesday while energy stocks cut earlier losses after U.S. President Donald Trump said the United States would quit the Iran nuclear deal, confirming what many investors had expected.
In a televised speech, Trump said the United States would withdraw from a 2015 international agreement designed to deny Tehran the ability to build nuclear weapons, and also reinstate sanctions on Iran.
The S&P energy sector trimmed earlier losses to trade down 0.1 percent as oil prices also reduced earlier declines.
The decision to leave the agreement with Iran is likely to raise the risk of conflict in the Middle East, upset America’s European allies and disrupt global oil supplies. Trump said he is willing to negotiate a new deal with Iran.
“It does create more global uncertainty but people shouldn’t be surprised. We’re selling off but we’re not down that much,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
Major stock indexes recovered but then fell again to levels prior to Trump’s speech.
“He’s not closed the door and shunned them. He wants a new deal. The door is open to try again, which is probably less harsh than what he could have said,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
“There’s going to be speculation around any un-measurable risk and political risk is un-measurable. This afternoon will be the real effect now he’s made the statement,” Battle said.
At 2:52 p.m. ET, the Dow Jones Industrial Average was down 0.36 percent at 24,270.35 points, while the S&P 500 had lost 0.35 percent to 2,663.23.
The Nasdaq Composite dropped 0.29 percent to 7,244.31.
S&P industrials rose 0.26 percent, leading the market, followed by financials, up 0.16 percent. Other major sectors had losses.
Comcast fell 5.07 percent after Reuters reported the cable operator is preparing to make an all-cash offer for media assets that Twenty-First Century Fox has agreed to sell to Disney for $52 billion.
Disney, which is due to report its results after markets close, was down 1.47 percent. Fox’s shares dipped 0.4 percent.
Declining issues outnumbered advancing ones on the NYSE by a 1.35-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored decliners.
The S&P 500 posted 17 new 52-week highs and 12 new lows; the Nasdaq Composite recorded 108 new highs and 38 new lows.