Oil Sinks, Stocks Climb as Trump Backs Fragile Israel-Iran Truce – Europe Market Wrap
Oil slumped and equities gained as US President Donald Trump expressed confidence that a fragile truce between Israel and Iran would hold, reinforcing investors’ optimism for a lasting resolution to the conflict.
Brent crude slid as much as 5.6% and erased all gains accumulated since the onset of Israel’s attacks on Iranian nuclear sites, after Trump announced that the two warring nations agreed to a ceasefire. The benchmark later trimmed losses to trade above $69 a barrel as Israel reported a missile launch from Iran and instructed its military to respond.
Iran denied firing the missiles following the truce, according to state media, while Trump implored Israel in a social media post not to follow through, calling it a “major violation.” Trump subsequently posted that “Israel is not going to attack Iran.”
S&P 500 futures rose 0.7%, signaling a second day of gains for the US benchmark. European stocks and Asian stocks also advanced. The dollar headed for its biggest drop since the outbreak of the conflict. The yield on 10-year Treasuries dropped two basis points to 4.33% as investors’ awaited Federal Reserve Chair Jerome Powell’s testimony before lawmakers.
The rapid-fire sequence of events followed a turbulent stretch in financial markets, which have been roiled for nearly two weeks by fears of an escalating conflict. Volatility was particularly high in oil, as concerns over supply and shipping disruptions had pushed Brent crude to nearly $80 a barrel.
