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Update: Nasdaq, S&P 500 Hit 5-Week Lows Amid Re-Escalation in Middle East

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Update: Nasdaq, S&P 500 Hit 5-Week Lows Amid Re-Escalation in Middle East

(Updates with market moves at the end of the day.)

The Nasdaq Composite and the S&P 500 fell to the lowest levels in about five weeks on Wednesday as renewed tensions between the US and Iran pushed oil prices higher.

The Nasdaq fell 2% to 25,169.5, its lowest close since May 4. The S&P 500 lost 1.6% to 7,267, the lowest finish since May 5. The Dow Jones Industrial Average shed 1.9% to settle at 49,918.8, the lowest since May 19.

Most sectors were in the red, led by industrials' 3.4% slump, while consumer staples paced the gainers.

West Texas Intermediate crude oil was up 2.6% at $90.46 a barrel in late-afternoon trade, while Brent rose 2.2% to $93.42.

Iran will have to "pay the price" for taking too long to agree to a peace deal, US President Donald Trump said in a social media post Wednesday.

The US will resume attacks on Iran Wednesday, CNN reported, citing Trump.

US forces launched airstrikes Tuesday against Iran after Tehran shot down an American Apache helicopter, Central Command said. Iran struck American military bases across Jordan, Kuwait, and Bahrain, media reports showed.

"With no imminent deal in sight and with the global oil market tightening significantly every day, we see upside to prices, particularly if these disruptions linger into the third quarter, a period of seasonally stronger oil demand," ING Bank said in a report Wednesday.

US Treasury yields were mixed, with the 10-year rate up 2.3 basis points at 4.55% and the two-year rate little changed at 4.14%.

In economic news, US annual inflation accelerated to the highest in about three years last month, fueling expectations that the Federal Reserve will keep interest rates on hold for some time.

"US inflation continues to vault higher on the back of swiftly rising energy prices and four months of closure of the Strait of Hormuz," BMO Chief US Economist Scott Anderson said in a report.

Monthly headline and core inflation measures, however, eased.

"The milder rise in core (consumer price index) inflation in May will buy the Fed some time to wait a bit longer before taking any action on raising interest rates."

Markets widely expect the Fed to leave interest rates unchanged next week, which would mark its fourth straight pause, according to the CME FedWatch tool.

In company news, Super Micro Computer (SMCI) shares slid 28%, the worst performer on the S&P 500, as the company announced a series of concurrent equity and equity-linked financing transactions amounting to $7 billion.

Casey's General Stores (CASY) shares surged 20%. Late Tuesday, the convenience store operator logged better-than-expected fiscal fourth-quarter results.

Gold was down 4.2% at $4,105.10 per troy ounce, while silver fell 2.2% to $63.82.

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