President Trump calls Iran war ‘a little trip’
President Donald Trump has brought up war with Iran as a “bit of a trip” during the Republican retreat.
March 10 (Reuters) – U.S. stock index futures rose on Tuesday as investors hoped for a quick resolution to the Middle East conflict, which has caused soaring energy prices and heightened concerns about inflation following President Donald Trump’s comments about war.
Oil and natural gas prices fell from feared levels of $120 a barrel after President Trump said on Monday that the conflict between the United States, Israel and Iran may be nearing an end, moving forward from the originally expected four to five week schedule.
But the enthusiasm was accompanied by an element of alarm, as Iran vowed to continue its oil blockade across the region and President Trump promised stronger military retaliation. Energy producers in the Middle East have not yet restarted production in earnest, and transportation costs are likely to rise for some time.
Still, Tuesday’s drop in energy prices came as a relief to beleaguered travel stocks. Airlines American AAL.O and Delta DAL.O each rose more than 1% in premarket trading, while cruise lines Carnival CCL.N and Royal Caribbean RCLH.N edged higher.
Energy companies such as Occidental OXY.N fell 2.5%, while ConocoPhillips COP.N and ExxonMobil XOM.N edged lower.
The rise in oil prices since the start of the conflict had investors concerned that the U.S. economy could face stagflation, complicating the Federal Reserve’s efforts, as some data suggested a weakening labor market.
Traders are pricing in a possible 25 basis point (bp) rate cut around September, according to data compiled by LSEG.
As of 5:14 a.m. ET, the Dow E Mini YMcv1 was up 211 points, or 0.44%, and the S&P 500 E Mini EScv1 was up 29.75 points, or 0.44%. The Nasdaq 100E Mini NQcv1 rose 134.25 points (0.54%).
Global markets, including Asian and European stocks, also rose, with the CBOE volatility index .VIX, Wall Street’s fear gauge, dropping 2.19 points to 23.31.
Two inflation reports are expected to be released later this week, which are unlikely to reflect recent spikes in energy and transport costs, but will bring scrutiny to the level of inflation before the Middle East conflict.
Technology stocks .SPLRCT have rebounded, capping losses across Wall Street relative to their peers since the war began, making them the best-performing sector on the S&P 500 index .SPX this month, up 1.4 percent.
Semiconductor companies such as Nvidia Inc NVDA.O rose 0.4% on Tuesday, while SanDisk SNDK.O and Western Digital WDC.O each rose more than 2.3%.
Hewlett Packard Enterprise rose 2.9% after the networking equipment maker reported better-than-expected second-quarter sales.
Focus will turn to corporate software maker Oracle ORCL.N’s earnings after the market closes, with traders scrutinizing signs of debt-fueled AI spending. The stock price rose 2%.
Reflecting the broader risk-on mood, crypto stocks such as Strategy MSTR.O rose 3%, while Coinbase COIN.O rose 3%, trailing Bitcoin’s BTC.O rise of 2.7%.
(Reporting by Johan M. Cherian in Bangalore; Editing by Shinjini Ganguly)
