Wall Street Ignores U.S. Strikes on Iran: What It Means for Your Investments | CNN Business

Investing in the U.S. markets these days feels like juggling while on a unicycle. Traders face fast-changing tariffs, confusing economic signals, and rising tensions in the Middle East.

You might expect the recent U.S. strikes on Iranian nuclear sites to shake things up—pulling stocks down and sending oil prices soaring as worries grow about retaliation and the security of the Strait of Hormuz, which is vital for global oil flow. Surprisingly, stocks have remained steady. Oil prices quickly fell back from an initial rise.

What’s going on? Investors seem to be treading carefully. If the U.S. and Israel’s strikes are mostly done and any retaliation from Iran is limited, it could actually stabilize markets. This would reduce volatility and ease fears about Iran possibly becoming nuclear-armed. However, if tensions escalate further and Iran cuts off oil supplies, that could trigger inflation and a global downturn.

On Wall Street, things remain calm despite the underlying tensions. Kit Juckes, chief FX strategist at Societe Generale, stated, “So far, so muted.” He emphasized that traders are now waiting to hear from Iranian leaders about any potential response.

On Monday, the Dow started lower but bounced back, gaining 160 points. The S&P 500 and Nasdaq also saw some ups and downs but ended positively. CNN’s Fear and Greed Index, which measures market mood, shifted into “Greed” after sitting in “Neutral.”

Turning to oil prices, they dipped sharply on Monday after an initial increase. Just hours after hitting $78.40 a barrel, U.S. crude fell about 1%. Meanwhile, safe-haven assets like gold were relatively unchanged, with only a slight drop.

The U.S. dollar gained around 0.7%, influenced by higher oil prices as oil is traded in dollars. Despite fears of a slowdown due to tariffs imposed under previous administrations, the dollar tends to strengthen in uncertain times. George Vessey, a strategist at Conerva, noted that tensions in the Middle East could provide support for the dollar through the commodity market. He warned that any escalation could push oil prices higher, causing economic strain at the same time tariffs are affecting trade.

Interestingly, Wall Street traders currently believe that the worst may be over for the conflict. They remain optimistic about potential new trade deals and even a possible interest rate cut by the Federal Reserve later this year.

In a nutshell, Wall Street appears to have hit the snooze button, waking up on Monday morning as if nothing major had happened over the weekend. The balance between optimism and caution continues as investors navigate this complex landscape.



Source link