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Update: US Equity Indexes Sink as Houthis Target Saudi Tankers in Red Sea, Mag-7 Stalwarts Disappoint
(Updates with index/price moves and company/geopolitical news from the first paragraph.)US equity indexes dropped as government bond yields jumped with crude oil after Iran-aligned Houthis attacked Saudi Arabian tankers in the Red Sea and shares of mega-caps Alphabet (GOOG, GOOGL) and Tesla (TSLA) sank.The Nasdaq Composite slumped 2.1% to 25,141.3, the S&P 500 dropped 1.2% to 7,410.6, and the Dow Jones Industrial Average declined 1% to 51,709.3 after midday Thursday. Consumer discretionary and communication services were the standout decliners, down almost 5% each, while technology also lagged. Industrials and energy topped the gainers.Iran flew Islamic Revolutionary Guard Corps commanders, military advisers, and missile- and drone-related equipment into Yemen this month, according to four sources, in a move that suggests Tehran is seeking to strengthen the ability of its Houthi allies to threaten Red Sea shipping, Reuters reported.Houthi rebels said they attacked two Saudi Arabian oil tankers in the Red Sea on Thursday, according to a report from the Associated Press, widening the disruption to crude oil supplies from the Middle East. President Donald Trump warned Tehran would be held accountable for any further Houthi attacks in the Strait of Hormuz, CNN reported. Secretary of State Marco Rubio said Iran "suckered" the group into attacking shipping lanes, the news report added.The CBOE Volatility Index VIX, also known as the fear gauge for equities, catapulted 14.5% to 19.05.Meanwhile, Jordan, Bahrain and Kuwait have reported retaliatory missile and drone attacks from Iran after a 12th consecutive day of US strikes on the Islamic Republic, Al Jazeera, a Middle Eastern broadcaster, reported.The front-month US West Texas Intermediate soared 6.3% to $92.33 a barrel, and global benchmark North Sea Brent spiked 6.9% to $100.60 a barrel.US Treasury yields jumped, extending gains. The 10-year marched 3.6 basis points higher to 4.69% after touching its highest intraday level in a year. The two-year surged 4.7 basis points to 4.35% after yields hit a fresh 52-week high this week.In precious metal markets, gold futures dropped 2.4% to $4,053.70, and silver futures slumped 3.9% to $57.96.In company news, Tesla shares fell 13%, the worst performer in the S&P 500 and the Nasdaq, after the firm reported a steeper-than-expected drop in Q2 adjusted earnings. Gross and operating margins missed consensus "considerably," and "more important aspects are an increase in capital investments and operating expenses related to the AI transition," Truist Securities said in a note. Free cash flow turned negative in Q2, with an outflow of $1.1 billion.The European Commission fined Alphabet's Google 890 million euros ($1.04 billion) after the company violated the Digital Markets Act through self-preferencing in Google Search and anti-steering practices on Google Play. Shares slumped 6.6%, among the steepest decliners on the S&P 500, the Nasdaq, and the Dow.United Rentals (URI) reported Q2 adjusted earnings and revenue above market expectations and raised its full-year fiscal 2026 sales guidance. Shares soared 12%, one of the top gainers on the S&P 500.Honeywell Technologies (HON) reported Q2 adjusted earnings and sales that beat consensus, and lifted its full-year 2026 earnings guidance range. Shares advanced 5.2%, the Dow's leader.
Dow JonesNasdaq CompositeS&P 500$GOOG$GOOGL$HON$TSLA$URI
