Markets Hold Breath as Trump Mulls Iran Strike, Geopolitical Tensions Simmer – Europe Market Wrap

Markets settled into wait-and-see mode on Friday after the White House appeared to dial back speculation that Washington was on the verge of joining Israel’s strikes on Iran.

Contracts on the S&P 500 edged lower after dropping 0.9% on Thursday when US markets were closed for the Juneteenth holiday. European stocks rose. Brent crude fell around 2% to temper gains from earlier in the week. Treasuries were steady, while a gauge of the dollar slipped for a second day. There were reports on Thursday that senior US officials are preparing for a possible strike on Iran in the coming days. The White House, however, said President Donald Trump would decide within two weeks, and there was still a “substantial chance” of a negotiated settlement.

Israel, meanwhile, struck more of Iran’s nuclear sites and warned it could bring down Tehran’s leadership as both sides awaited the US president’s decision. Iran maintained Friday it won’t negotiate with the US while Israel’s assault continues. With the weekend in sight, traders appear to be staying on the sidelines, unsure about the trajectory of the conflict.

The Stoxx Europe 600 index snapped a three-day losing streak, though it remained on track for its first back-to-back weekly declines since the start of April.

Brent futures have been pricing in a geopolitical premium of about $8 a barrel since Israel and Iran began attacking each other last week, according to a survey of analysts and traders. US intervention in the conflict would bolster that further, but exactly how much would depend on the nature of the involvement, the nine respondents said.