The Dow falls 300 points due to the port strike and the Fed's cautious interest rate policy

The Dow Jones Industrial Average fell more than 300 points on Tuesday morning following the Federal Reserve's signal Future rate cuts will be less aggressive. Fed Chair Jerome Powell's comments on Monday came less than two weeks after the Federal Open Market Committee approved a cut of half a percentage point (50 basis points).This marks the first reduction after years of increases to combat inflation following the pandemic. Additionally, because Iran is planning an attack on Israel, Oil prices rose 3% on Tuesday morning.

Powell expressed optimism about the labor market on Monday, noting that layoffs remain low. He highlighted that the labor force participation of people aged 25 to 54 is near historic highs, while the labor force participation of prime-age women continues to reach new all-time records. Powell also expressed optimism about controlling inflation, pointing to recent data that suggests steady progress toward the Fed's 2% annual inflation target.

With the economy in solid shape, Powell hinted at the possibility of further rate cuts – but stressed that the latest half-percentage point cut should not be seen as a signal that future cuts will be equally aggressive.

And on Tuesday, thousands of longshoremen on the East and Gulf Coasts officially went on strikeafter negotiations between their union and an employers' alliance failed. The strike is likely have a significant impact on the entire US economy. Nearly every industry relies on major ports on the East and Gulf Coasts to deliver daily shipments of equipment, food and supplies. Ports and facilities that accommodate about 51% of the country's total port capacity are affected by the strikes, according to the ministry Miter Corporation.

Shortly after markets opened on Tuesday, the Dow fell 303 points, or 0.7%, to 42,026. Meanwhile, the S&P 500 and Nasdaq fell 0.7% and 0.8%, respectively.

Oil prices are rising and shipping stocks are falling

Given the escalating tensions in the Middle East, with As Iran prepares to attack Israel, oil prices rose 3%. West Texas Intermediate rose 3% to $70.22 a barrel, while Brent rose 2.72% to $73.65 a barrel.

Additionally, shipping stocks fell on Tuesday, with shares of Zim (ROOM), Maersk (AMKBY) and Golden Ocean Group (GOGL) decreased by 6.3%, 6% and 2%, respectively.

Tech stocks are also in the red

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

Shares of Amentum Holdings (AMTM), a global technology and engineering services partner that supports key programs of national importance in defense and security, is down more than 14% since the most recent issue Appointed Stephen A. Arnette as Chief Operating Officer. The company was also recently added to the S&P 500.

— William Gavin contributed to this article.