The Dow Jones Industrial Average fell by more than 300 points Tuesday morning following the Federal Reserve’s signal that future interest rate cuts will be less aggressive . The comments by Fed chair Jerome Powell on Monday came less than two weeks after the Federal Open Market Committee approved a half-percentage-point (50 basis points) cut , marking its first reduction after years of hikes to address post-pandemic inflation. Additionally, due to Iran planning an attack on Israel, oil prices increased by 3% Tuesday morning.

Powell expressed confidence in the labor market on Monday, noting that layoffs remain low. He highlighted that the labor force participation rate for individuals aged 25 to 54 is near a historic high, while prime-age women’s participation continues to reach new all-time records. Powell also expressed optimism about controlling inflation, citing recent data that point to steady progress toward the Fed’s annual 2% inflation target.

With the economy in solid shape, Powell hinted at the possibility of further rate cuts — but emphasized that the recent half-percentage-point reduction should not be seen as a signal that future cuts will be as aggressive.

And on Tuesday, thousands of dockworkers across the East Coast and Gulf Coast officially went on strike , after negotiations between their union and an alliance of employers failed. The strike is likely to have major consequences for the broader U.S. economy . Just about every industry relies on major ports across the East Coast and Gulf Coast to deliver shipments of equipment, food, and supplies each day. Ports and facilities handling approximately 51% of the nation’s overall port capacity are impacted by the walkouts, according to the Mitre Corporation .

In the afternoon, the Dow was down 140 points, or 0.3%, to 42,192. Meanwhile, the S&P 500 and Nasdaq dipped 0.9% and 1.6%, respectively.

Oil prices rise, and shipping stocks decline

Amid escalating tensions in the Middle East, with Iran preparing to attack Israel, oil prices have surged by 3%. West Texas Intermediate rose by 3% to $70.22 per barrel, while Brent increased by 2.72% to $73.65 per barrel.

Additionally, shipping stocks declined on Tuesday morning, with shares of Zim ( ZIM ), Maersk ( AMKBY ), and Golden Ocean Group ( GOGL ) dropping by 6.3%, 6%, and 2%, respectively.

Tech stocks are in the red, too

Among the tech giants, Apple ( AAPL ) and HP ( HPQ ) shares were down by 4% and 2.7%, respectively, while Dell Technologies ( DELL ) fell 2.9%.

Shares of Amentum Holdings ( AMTM ), a global technical and engineering services partner that supports critical programs of national significance in defense and security, dropped by more than 14% Tuesday morning. The company recently appointed Stephen A. Arnette as chief operating officer and was also recently added to the S&P 500.

— William Gavin contributed to this article.

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