Oil Crashes, Gold Dumps, Stocks Yawn -- Oh, and Alphabet's Joining the Dow

The Dow Jones Industrial Average (DJINDICES: ^DJI) kept its modest winning streak alive on Wednesday, edging slightly higher while the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) tagged along with even smaller gains. The moves grew larger by noon, but not by much.

The indexes weren't the big story today. The real action was in commodities.

Oil tumbled below $70 per barrel for the first time since the Iran conflict began in late February, and gold dropped nearly 3%.

^DJI data by YCharts

Oil falls to pre-war levels

U.S. crude returned to prices not seen since the Iran conflict began as tankers began transiting the Strait of Hormuz again. The United States Oil Fund (NYSEMKT: USO) fell 4%, extending a sharp decline that began when the U.S. and Iran announced a 60-day framework for final negotiations last week.

President Trump claimed Iran had promised no tolls on Hormuz traffic. Whether that holds remains to be seen, but oil markets aren't waiting around to find out.

Gold joined the sell-off. The SPDR Gold Shares (NYSEMKT: GLD) fund fell more than 2.5% as investors decided they didn't need quite so much disaster insurance after all.

Image source: Getty Images.

The stabilizing Iran situation didn't exactly rub off on Wall Street at first. The three top indexes were up by roughly 0.4% at 10:30 a.m. ET, but a sudden jump followed a few minutes later. The move came as Amazon (NASDAQ: AMZN) rose 3%, boosted by a makeover of its Zoox robotaxi product.

Then there's the big Dow Jones tidbit. The tightly moderated list of 30 elite American stocks will add Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) as a member on Monday morning, replacing telecom giant Verizon Communications (NYSE: VZ). Alphabet's stock is up roughly 2% on the news, while Verizon took a 2% haircut. Hardly earth-shaking moves, but the index will indeed look significantly different next week. Alphabet has been on the outside looking in for ages.

The waiting game

There are few market-moving financial reports in the doldrums between two earnings seasons, but memory chip giant Micron Technology (NASDAQ: MU) will make some news tonight. With an off-kilter fiscal year that doesn't end on Dec. 31, but on the Thursday closest to Aug. 31, the company is due for a third-quarter checkup after Wednesday's closing bell.

Micron's stock has soared 712% over the last year, but also trades 14% below Monday's intraday peak. It's volatile stuff, and the market reaction to this trillion-dollar stock's report should move the Nasdaq Composite and S&P 500 indexes tomorrow. In what direction, I can't say. Micron's shares trade at a massive 20 times trailing sales but just 8.6 times forward earnings estimates, setting it up for volatility in both directions.

Thursday morning's PCE inflation report looms larger, though. Economists expect a 4.1% reading, more than double the Fed's 2% target. Rate-hike expectations have doubled in two weeks, and every decimal point will matter.

Anders Bylund has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.