Quick overview

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All three major New York stock indexes closed lower as concerns mounted that a potential energy crisis could reignite inflation.

U.S. equities ended Tuesday in negative territory after hopes of a Middle East de-escalation faded. Earlier reports suggesting renewed contacts between Washington and Tehran were denied by Iranian officials, who dismissed the possibility of any joint agreement.

In this context, the Dow Jones Industrial Average fell 0.18% to 46,123.72, the S&P 500 declined 0.33% to 6,559.62, and the Nasdaq Composite dropped 0.84% to 21,761.89.

PMI signals stagflation risks as Fed weighs in

Investor attention turned to preliminary U.S. Purchasing Managers’ Index (PMI) data for March. The composite index slipped to 51.4 from 51.9 in February, marking its lowest level in 11 months.

According to Chris Williamson, chief economist at S&P Global Market Intelligence, the data point to a concerning mix of slowing growth and rising inflation following the escalation of conflict in the Middle East. Businesses are reporting weaker demand amid heightened uncertainty and increased cost-of-living pressures.

Last week, Jerome Powell said it remains too early to determine the full scope and duration of the conflict’s economic impact, though he warned that rising energy prices are likely to push headline inflation higher in the near term.

Meanwhile, a weekly U.S. labor market indicator from ADP showed job gains of 10,000—above expectations. However, an unstable labor market, combined with the risk of an energy-driven inflation shock linked to Iran, is becoming a key concern for Federal Reserve policymakers.

Private credit under pressure

Shares of U.S. private credit firms came under pressure after two major players restricted withdrawals from key funds. Apollo Global Management rose 0.7%, while Ares Management fell 1% after both firms limited redemptions following a surge in withdrawal requests.

Private credit has been under scrutiny since Blue Owl Capital restricted investor access to one of its funds in February.

Private credit refers to loans provided directly to companies by non-bank institutions—such as private funds or asset managers—bypassing traditional bank lending channels.

Notable movers

• Shares of ImmunityBio plunged 22% after the U.S. Food and Drug Administration issued a warning letter citing false and misleading promotional materials related to its bladder cancer treatment ANKTIVA.
• Klarna rose 4% after the digital payments provider announced it had doubled its funding line with Elliott Investment Management to $2 billion, expanding the partnership to support up to $17 billion in U.S. loan originations.
• Meanwhile, Hesai Group dropped 14% despite reporting stronger-than-expected fourth-quarter results, after issuing first-quarter revenue guidance below analysts’ estimates.