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US STOCKS-Wall Street's rally fades as Middle East angst overshadows earnings optimism
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US STOCKS-Wall Street's rally fades as Middle East angst overshadows earnings optimism
Apr 21, 2026 9:51 AM

* Indexes down: Dow 0.18%, S&P 500 0.27%, Nasdaq 0.16%

* Uncertainty over US-Iran war grips markets

* Apple ( AAPL ) names hardware veteran Ternus as new CEO to

succeed Cook

* UnitedHealth ( UNH ) gains after raising FY profit outlook

(Updates with late morning trading)

By Niket Nishant and Avinash P

April 21 (Reuters) - Wall Street's main indexes were

subdued on Tuesday, as renewed concerns about the Middle East

war halted an early rally in stocks and overshadowed earnings

optimism.

Pakistan is still awaiting a formal response from Iran to

confirm that it will send a delegation to attend a second round

of peace talks with the U.S. in Islamabad, the country's

Information Minister Attaullah ​Tarar said in a post on X.

The talks are scheduled against a fragile backdrop. In an

interview with CNBC earlier, U.S. President Donald Trump said he

does not want to extend the ceasefire with Iran, which is set to

expire soon.

A failure to resume the discussions could swiftly upend

investors' assumptions that peak uncertainty related to the war

has passed.

At 11:52 a.m. ET, the Dow Jones Industrial Average

fell 87.88 points, or 0.18%, to 49,354.68, the S&P 500

lost 19.21 points, or 0.27%, to 7,089.93 and the Nasdaq

Composite slipped 38.08 points, or 0.16%, to 24,366.32.

All the indexes were in positive territory earlier in the

session.

"Relief rallies only get you so far when the underlying

risks keep returning," said John Wyn-Evans, head of market

analysis at Rathbones.

WARSH HEARING IN FOCUS

Investors are also parsing comments from Kevin Warsh,

Trump's nominee to lead the Federal Reserve, whose confirmation

hearing was underway in the Senate on Tuesday.

He called for "regime change" at the U.S. central bank that

would include a new "framework" for controlling inflation and a

possible overhaul of how it communicates with the public about

monetary policy.

Republican Senator Thom Tillis has promised to block Warsh's

confirmation until the Department of Justice ends an

investigation into current Fed Chair Jerome Powell that Tillis

says threatens the central bank's independence.

The impasse could have far-reaching implications for

monetary policy, especially as Trump has vowed to fire Powell if

he does not leave when his term ends in May.

"The risk now is that if new leadership under Warsh does not

take hold by mid-June, the Fed could delay that 25 bps rate cut

and maintain a 'wait-and-see' stance instead," said Atakan

Bakiskan, U.S. economist at Berenberg.

EARNINGS, AI REASSURE INVESTORS

Optimism around AI and upbeat earnings have given investors

some reason to cheer.

J.P. Morgan raised its year-end target for the S&P 500,

citing AI and tech-driven earnings, while Amazon ( AMZN ) said

on Monday it will invest up to $25 billion in Anthropic,

signaling Big Tech is still willing to pour money into AI.

Amazon ( AMZN ) shares rose 1.8%, helping the S&P 500 consumer

discretionary sector advance 0.4%. Energy stocks

rose 0.5%, thanks to a jump in crude prices.

Of the 48 companies in the benchmark S&P 500 index that

reported earnings as of last Friday, 87.5% surpassed analysts'

estimates, compared with a long-term average of 67.4%, according

to LSEG data.

UnitedHealth ( UNH ) jumped 7.6% after the healthcare

conglomerate raised its annual profit forecast and beat Wall

Street expectations for the first quarter. The stock was the

biggest boost to the blue-chip Dow.

Peers CVS Health ( CVS ) and Humana rose 0.5% and

4.7%, respectively.

GE Aerospace fell 5.8%. The company said it was

bracing for a tougher backdrop of elevated oil prices, fuel

supply constraints and slower global growth.

Alaska Air ( ALK ) fell 3.2% as the airline withdrew its

full-year profit forecast.

Apple ( AAPL ) was among the other stocks under the

spotlight, falling 2.2%. The company said CEO Tim Cook would

hand over the reins to longtime hardware boss John Ternus.

Separately, data showed that U.S. retail sales increased

more than expected in March, while contracts to purchase

previously owned U.S. homes surpassed estimates.

Declining issues outnumbered advancers by a 1.83-to-1 ratio

on the NYSE and by a 1.65-to-1 ratio on the Nasdaq.

The S&P 500 posted 48 new 52-week highs and three new lows,

while the Nasdaq Composite recorded 135 new highs and 36 new

lows.

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