Donald Trump Iran Threats
U.S. stock market drifted higher in tentative trading ahead of a deadline President Donald Trump has set to bomb Iranian power plants. Like stock indexes, oil prices seesawed through the day amid continued uncertainty about what will happen in the war with Iran and how long it will slow the global flow of crude oil. Trump warned again he will bomb Iran’s power plants if it doesn’t open the Strait of Hormuz.
On Monday, S&P 500 rose 29.14 points, or 0.4 per cent, to 6,611.83, Dow Jones Industrial Average rose 165.21 points, or 0.4 per cent, to 46,669.88, Nasdaq composite rose 117.16 points, or 0.5 per cent, to 21,996.34, and Russell 2000 index of smaller companies rose 10.60 points, or 0.4 per cent to 2,540.64.
For the year, S&P 500 is down 233.67 points, or 3.4 per cent, Dow Jones is down 1,393.41 points, or 2.9 per cent, Nasdaq is down 1,245.65 points, or 5.4 per cent, Russell 2000 is up 58.74 points, or 2.4 per cent.
Wall Street Tech Stocks, Bond Market
On Wall Street, a split performance for the Big Tech stocks that dominate the U.S. market kept things in check. Apple rose 1.1%, and Amazon added 1.4%. Tesla slid 2.2%, and Microsoft fell 0.2%. Bank stocks were strong, including a 1.3% rise for JPMorgan Chase.CEO Jamie Dimon said in his annual letter to shareholders released on Monday that the U.S. economy continues to be resilient, and businesses still look healthy. He, though, also acknowledged that prices for stocks and other assets are high, which could imply “anything less than positive outcomes could have a dramatic impact on global markets.”
In the bond market, Treasury yields held relatively steady. The 10-year Treasury yield was sitting at 4.33%. That’s still well above its 3.97% level from before the war. The rise has pushed up rates for mortgages and other loans going to U.S. households and businesses, which slows the economy.
U.S Dollars
War in the Middle East and the closure of the Gulf’s chokepoint at the Strait of Hormuz has sent energy prices soaring and driven investors to dollars as the most effective safe haven, pushing the greenback higher, especially in Asia.
Hope for some sort of deal or breakthrough has held off further dollar buying through Easter, but markets are jittery and there are few big sellers of dollars ahead of U.S. President Donald Trumps’s 8 p.m. Eastern Time (midnight GMT) deadline.
“The dollar may ease modestly further in the near term because of optimism the U.S. will ‘end’ the Iran war,” said Commonwealth Bank of Australia analysts in a note.
“However, there are three participants in the war: the U.S., Israel and Iran. What matters for the world economy and currencies is whether the Strait of Hormuz is open. The U.S. leaving the conflict does not re-open the Strait.”