Eased Tensions on US-Iran Conflict Bring Mixed Stock Market Reactions
American financiers refrain from pouring funds
Take a breath, investors, as the immediate US involvement in the ongoing Israel-Iran conflict may be off the table, providing a temporary relief for US markets. However, US stock markets showed only modest gains, with the Nasdaq dropping slightly.
The unpredictable developments in the Middle East have left investors on edge, creating tension at US stock exchanges before the weekend. The Dow Jones ended the day up by 0.1%, settling at 42,206 points. The tech-heavy Nasdaq experienced a 0.5% decline, reaching 19,447 points, while the broad-based S&P 500 slid 0.2%, hitting 5,976 points.
Donald Trump suggested on Thursday that he would decide in the next two weeks whether the US would participate in attacks against Iran. This announcement created a flicker of concern, but the question of an immediate US intervention is no longer at the forefront. Despite this, AJ Bell's investment analyst, Dan Coatsworth, believes that the issue of potential US intervention will continue to be a concern for markets. Trump is faced with a dilemma, as his US supporters demand adherence to his "America first" policy and staying out of foreign conflicts.
Investors are hoping for a diplomatic resolution to Iran's nuclear program. Encouraging reports suggest that Iran might be willing to discuss uranium enrichment levels with European powers, even if a complete reduction to zero is not an option. The role of European countries has gained significance, with an Iranian government official stating their importance ahead of talks with the foreign ministers of Germany, France, and the UK in Geneva.
The oil market could face trouble if the conflict continues to escalate due to a US military intervention. A worry exists that Tehran could block the Strait of Hormuz, which sees the transport of around 19 million barrels of oil from various producing countries daily. Supply disruptions could lead to a surge in prices. Though oil prices rose on Friday, they fell back on other days. Brent crude dropped 2.1% to $77.29 per barrel, while US oil WTI fell 0.2% to $74.93.
The focus on Wall Street continues to revolve around the issue of inflation pressure. Representatives of the US Federal Reserve warned that inflation could pick up over the summer due to the effects of Trump's high import tariffs. However, Fed Governor Chris Waller suggested that the central bank should consider a rate cut at their next meeting at the end of July, as recent inflation data has been moderate, and the impact from tariffs might be temporary.
In individual stock trading, Kroger saw a 9.8% increase in share prices following the release of a better-than-expected sales outlook. Accenture experienced a 6.9% decline after reporting a decrease in order intake. The semiconductor industry took a hit due to rumors of planned export restrictions on chip equipment to China. Nvidia stocks fell 1.1%, while Intel shares dropped 2%.
Stay tuned for more insights on the stock market and its movements.
Source: ntv.de, ino/rts
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Before delving into individual stock trading performances, it's crucial to address policy matters that may impact the financial landscape. The community and employment policies, particularly in relation to the US's stance on foreign conflicts, continue to be a significant concern for investors. Moreover, the finance sector should keep a close eye on the impact of potential trade restrictions, such as those on chip equipment exports to China, on company revenues and stock prices.
