US stock futures fell after President Donald Trump announced that the war in Iran would continue.
Futures on the S&P 500 index fell by 0.8%, on the Nasdaq 100 by 1%, while those related to the Dow Jones Industrial Average fell by 352 points, or about 0.8%, writes CNBC.
In his speech, Trump presented the latest information on the conflict in the Middle East. Although he said the US was “very close” to ending the war in Iran, he added that it would “hit very hard” on Tehran.
“In the next two to three weeks, we will return them to the Stone Age, where they belong,” he declared.
During the speech, stock futures fell, while oil prices rose. West Texas Intermediate (WTI) crude futures rose 3.5% to more than $103 a barrel, while Brent crude futures gained more than 4% to surpass $105. At one point, the price of Brent briefly reached 106 dollars per barrel, currently it is around 105 dollars.
This decline followed an optimistic day on the stock markets. All three major indices rose in regular trading on Wednesday, boosted by investors’ hopes that an end to the war between the US and Iran is in sight. The S&P 500 index rose by 0.72%, the Nasdaq Composite by 1.16%, and the Dow Jones by 224.23 points, or 0.48%.
The mood was fueled by Trump’s earlier statements. On Wednesday morning, the Truth Social social network announced that the Iranian president had requested a ceasefire. Trump stated that the US will “consider” the offer only when the Strait of Hormuz is “open, free and passable”.
The announcement came after the president told reporters at the White House on Tuesday afternoon that he expected US military forces to leave Iran in “two or three weeks.”
“We don’t know how long this will last, but as market participants we have to be aware of the damage that has already been done,” Sebastien Page, head of global multi-asset strategies at T. Rowe Price, told CNBC. “I don’t think we’re going to get back to normal inflation rates quickly. It’s a slow-moving macroeconomic process.”
“We have a situation where the economy is still strong, but we have to worry because we are on the very edge of a potential shock to economic growth,” Page added.
The Asia-Pacific markets also reacted to Trump’s speech, which today reversed previous gains. The Japanese Nikkei 225 fell by 1.4%, and the Topix by 0.94%. South Korea’s Kospi sank by 2.82%, while the Kosdaq fell by 3%. Australia’s S&P/ASX 200, which started the day in the red, ended the day down 0.48%. Hong Kong’s Hang Seng opened down 0.5%, while mainland China’s CSI 300 index was unchanged.
As for the US market, today is the last day of trading in this shortened week as markets are closed on Good Friday. Traders will watch data on new jobless claims on Thursday morning, while the March jobs report is expected on Friday morning.
