Stocks, oil on roller coasters as Trump, Iran conflicting reports
U.S. stocks were poised to soar at the open Monday, after President Donald Trump announced he was postponing all military strikes against Iranian power plants for a period of five days.
Iranian state media responded to Trump’s message by saying the US president had “backed off” after Iran’s strong response.
Iran’s semi-official Mehr news agency also relayed a message from the Iranian Foreign Ministry that “there is no dialogue between Tehran and Washington.”
S&P 500 and Nasdaq futures initially rose about 3% following Trump’s announcement, but those gains faded to about 1.6% after Iranian media reports.
Dow Jones Industrial Average futures also rose as high as 1,300 points immediately after Trump’s statement, before returning to around 500 points. Russell 2000 futures rose 3%.
Oil prices also fell about 5%, with U.S. crude trading at around $92 per barrel around 8:15 a.m. ET. International Brent crude oil fell to around $105 per barrel. Initially, oil prices had fallen 10% since Trump took office.
Nonetheless, crude oil prices have risen nearly 40% since the war began on February 28, and 60% since the start of the year.
Trump’s social media announcement Monday comes after the president said Saturday he had given the regime 48 hours to “fully open, without threat, the Strait of Hormuz.” These 48 hours were to end Monday evening.
U.S. natural gas prices fell 4%, European natural gas futures fell 9%, and heating oil prices fell 3%. Fuel oil futures can also be an indicator of the price of jet fuel.
U.S. Treasuries also rose initially, and the yields that guide consumer borrowing rates fell after posting sharp rises Thursday and Friday on growing inflation fears stemming from soaring energy prices. However, yields remained largely unchanged after the Iranian media statements.
