New York (AFP) – Comments from President Donald Trump declaring the Middle East war “pretty much” over sent US stocks skyward at the end of Monday’s session after surging oil prices weighed on stocks earlier in the day. All three major indices moved suddenly higher after Trump’s comments were reported, with the Dow Jones Industrial Average finishing 0.5 percent up at 47,740.80, a swing of 1,125 points from earlier in the day.
Trump told CBS in a phone interview that the war was “very complete” and that the United States was “very far” ahead of his initially planned time frame of four to five weeks, without giving details of any solution to the conflict still raging in the Middle East. Trump’s “comment turned things on a dime,” said Art Hogan of B. Riley Wealth Management.
Besides questions about the place of Iran and the state of the Middle East after Israeli attacks on Lebanon and Iran’s retaliation against neighboring countries, the energy market remains in turmoil after the essential closure of the Strait of Hormuz. But Trump, who had on Friday declared on social media that only Iran’s “UNCONDITIONAL SURRENDER” would end the hostilities, appears to be rethinking the situation, given the war’s unpopularity and its harmful impact on financial markets, according to Hogan.
Major US equity indices spent most of the day in the red following a day of declines on European and Asian markets amid the latest surge in oil prices. After increasing by around 30 percent during Asian trading, international benchmark Brent and the main US oil contract WTI both pared gains and slid back under $100 per barrel. Brent finished up 6.8 percent at $98.96 a barrel, while WTI gained 4.3 percent to $94.77 a barrel. Both contracts were later in negative territory in after-hours trading following Trump’s comments to CBS.
Iranian retaliatory attacks have all but halted maritime traffic through the Strait of Hormuz, through which a fifth of global crude oil and liquefied natural gas pass. All eyes will be on the Strait of Hormuz in the coming days. “The surge higher for the price of oil is significantly increasing stagflation risks for the global economy and could trigger a deeper sell-off in global equity markets,” said analyst Lee Hardman at Mitsubishi UFG financial group. Stagflation refers to a period of high inflation coupled with economic stagnation.
Key figures at around 2140 GMT:
Brent North Sea Crude: UP 6.8 percent at $98.96 per barrel
West Texas Intermediate: UP 4.3 percent at $94.77 per barrel
New York – Dow: UP 0.5 percent at 47,740.80 (close)
New York – S&P 500: UP 0.8 percent at 6,795.99 (close)
New York – Nasdaq Composite: UP 1.4 percent at 22,695.95 (close)
London – FTSE 100: DOWN 0.3 percent at 10,249.52 (close)
Paris – CAC 40: DOWN 1.0 percent at 7,915.36 (close)
Frankfurt – DAX: DOWN 0.8 percent at 23,409.37 (close)
Seoul – Kospi: DOWN 6.0 percent at 5,251.87 (close)
Tokyo – Nikkei 225: DOWN 5.2 percent at 52,728.72 (close)
Hong Kong – Hang Seng Index: DOWN 1.4 percent at 25,408.46 (close)
Shanghai – Composite: DOWN 0.7 percent at 4,096.60 (close)
Euro/dollar: DOWN at $1.1614 from $1.1618 on Friday
Pound/dollar: UP at $1.3427 from $1.3413
Dollar/yen: UP at 157.85 yen from 157.78 yen
Euro/pound: DOWN at 86.49 pence from 86.62 pence
© 2024 AFP
