President Trump says Iran war will end soon, but it’s unlikely to end this week
“It’s coming soon.” President Donald Trump said the war with Iran is unlikely to end this week, but “it won’t be for long.”
March 17 (Reuters) – U.S. stock index futures fell on Tuesday as Middle East conflict pegged oil prices near $100 a barrel and raised inflation concerns, which will be a key talking point when the Federal Reserve begins its two-day meeting later in the day.
Nvidia Inc NVDA.O’s annual developer conference also drew attention, even as Wall Street was cooling off from a tech-led rally in the previous session that saw the benchmark S&P 500 .SPX post its biggest single-day gain in a month.
Nvidia outlined a strategy to compete more aggressively in the fast-growing market for running AI systems in real time, saying the revenue opportunity for its artificial intelligence chips could reach at least $1 trillion by 2027.
The company’s shares were flat in premarket trading after rising 1.6% on Monday, while peers Advanced Micro Devices Inc AMD.O and Broadcom Inc AVGO.O were slightly lower.
After US President Donald Trump’s calls for allies to protect the Strait of Hormuz went unheeded, investors are now focused on an escalating Middle East conflict that is likely to keep the Strait closed.
Travel stocks Delta DAL.N and Carnival CCL.N fell 1%, while energy companies Occidental OXY.N and EQT EQT.N each rose about 1%.
Securities firms raised their outlook for energy prices that could hurt economic growth, a point also made by Australia’s central bank when it raised interest rates earlier in the day.
The U.S. Federal Reserve is likely to leave borrowing costs unchanged at the end of its two-day meeting on Wednesday.
But investors are pricing in a hawkish outlook, with short-term Treasury yields creeping higher and interest rate futures suggesting one 25 basis point (bp) cut toward the end of the year, down from about 2 basis points before the war, data compiled by LSEG show.
Analysts at UBS said this week about the decisions of central banks around the world: “While we do not expect central banks to make sudden policy decisions, policymakers are likely to emphasize caution against inflation risks given the rise in oil prices and the uncertainty of a period of war.”
“Comments that are more hawkish than expected could create further volatility in a market that is vulnerable to changes in sentiment.”
As of 5:11 a.m. ET, the Dow E-mini YMcv1 was down 104 points, or 0.22%, and the S&P 500 E-mini EScv1 was down 20 points, or 0.30%. The NASDAQ 100E Mini NQcv1 fell 95.25 points (0.39%).
Futures tracking the interest rate-sensitive Russell 2000 Index RTYcv1 fell 0.7%, while Wall Street’s fear gauge CBOE Volatility Index .VIX rose 0.57 points to 24.06.
Despite the global market turmoil caused by the war, U.S. stocks have fared better than those in Europe and Asia on hopes that the economic fallout will be less severe.
But analysts and Goldman Sachs CEO David Solomon stressed that investors had not yet fully considered the war’s impact on the global economy.
The conflict has caused the scheduled U.S.-China summit to be postponed at President Trump’s request, casting a shadow on the stable relations between the two countries since their last meeting in October.
Among other stocks, ride-hailing app Uber UBER.N rose 2.3% after announcing plans to roll out robotaxis, powered by Nvidia’s self-driving software, in 28 cities starting next year.
Plant-based meat maker Beyond Meat BYND.O fell 6% after its annual report was postponed, and preliminary quarterly sales fell short of expectations.
(Reporting by Johan M. Cherian in Bangalore; Editing by Krishna Chandra Elli)
