Equities Rose as Fear of All-Out Mideast Conflict Eases – US Market Wrap
Relative calm returned to global markets, with equities rising and oil declining alongside gold as fears subsided that Israel’s war against Iran would escalate into a wider conflict. News reports that Tehran wants to restart talks over nuclear programs also fuelled risk-on sentiment.
Equities recovered from Friday’s drop, with the S&P 500 up roughly 1%. West Texas Intermediate fell below $72 per barrel after peaking at the start of the day. The dollar remained quite stable. Longer-maturity Treasuries remained behind the market even after a $13 billion sale of 20-year notes yielded the expected amount, a significant improvement from last month’s auction disappointment, which triggered a broad selloff.
Trump said Iran wants to talk about de-escalating the confrontation with Israel after the two sides exchanged fire for the fourth day in a row. When asked if the United States might become more militarily involved, Trump declined to discuss the matter.
The commencement of hostilities between Israel and Iran disrupted the momentum that had pushed the S&P 500 back to near-record levels. While markets initially took a cautious, risk-off position to analyze how the dispute would play out, mood improved on Monday as investors believed that the attacks were unlikely to pull in further parties.
Tehran is signalling a desire to de-escalate hostilities with Israel and is willing to continue nuclear talks with the US as long as Washington does not join Israel’s attacks, according to the Wall Street Journal, which cited anonymous Middle Eastern and European officials. According to a similar claim, Iran delivered the message through Qatar, Saudi Arabia, and Oman.
