As tensions rose up in the Middle East, US futures swung and crude oil rocketed higher, diverting attention away from megacap tech companies’ recent solid profits.
Contracts on the Nasdaq 100 and S&P 500 plummeted by much to 0.5% apiece after Iran’s Fars agency reported two missiles hit an American patrol boat, before recovering most of the losses after the US denied a ship was hit. Brent crude rose more than 5% to trade above $113 a barrel before trimming its gains.
Iran sought to impose control over the Strait of Hormuz, a chokepoint for oil trade, after President Donald Trump announced that the US will begin escorting ships not involved in the fight through the strait on Monday. The heightened tensions halted a worldwide stock rise fuelled by excitement about the artificial intelligence trade and strong tech profits. However, the swift recovery from session lows showed that the rally could continue.
Global markets have been soaring for more than a month as traders have mostly ignored fears about the economic damage from the Middle East wars, with evidence of corporate resiliency propelling US stocks to their highest month since 2020. The fraction of firms missing analysts’ predictions is hovering around the lowest level since 2021.
Meanwhile, gold fell to under $4,600 per ounce. Bitcoin led cryptocurrencies higher, climbing 1% to about $80,000. Due to holidays in Tokyo and London, no cash trading of US Treasuries will take place until New York reopen. Mainland China has likewise closed.
