Trump Speech Pushes Stock Market into Selloff

Quick overview

President Donald Trump vowed to send Iran “to the Stone Age” with his next attack, and U.S. stocks reacted with a swift nosedive on fears of rising inflation and economic tightening.

Fears over war in the Middle East escalated Thursday after Trump addressed the nation with a promise to hit Iran hard. This news came on the heels of previous rumors during the week that predicted a peaceful, quick end to the fighting. Now, the stock market is reeling as a result, and the Dow is down 600 points.

The Nasdaq Composite dropped 2% and the S&P 500 fell 1.5%. Dow futures dropped 1.4% in a slide comparable to Monday’s decline. Unless news on Iran changes soon, the stock market is headed for a bearish trend that will extend weeks of decline.

Rising Oil Prices Sink Stock Futures

After Trump spoke on Wednesday night about ending the war quickly with strikes on Tehran, oil prices shot up. The price of Brent crude oil rose to $109 per barrel, an increase of 7%. West Texas Intermediate, which is a benchmark for crude oil futures, shot up 10% and hit $110 per barrel. Oil was already expensive when it passed $100 a barrel near the start of the Iran conflict, and the current prices reflect weeks of market upheaval as well as worry about the global supply of oil.

Higher oil and gas prices lead to higher inflation and less spending money for consumers. Investors who would usually be trading on the stock market have to pull back and think about where their money is going and if they can afford to put it into risky equities. The average consumer who does not trade on the stock market will be spending less with many of the companies that make up the stock exchange, leading to smaller profits and lost revenue.

Oil prices are not likely to drop until there is some kind of resolution in Iran. Until then, we expect stocks to tumble further, with extra pressure placed on tech stocks with their recent wild swings between highs and lows.

Thursday is the last day of stock trading for the week, with Good Friday marking the start of the Easter holiday. However, traders should watch for the Friday morning release of the March jobs report, which ADP reported on as a month of increasing jobs. The Iran conflict should not impact those numbers much, but it could definitely affect next month’s jobs report, as the fighting extends to its sixth week.

ABOUT THE AUTHOR See More

Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.

Gas Futures Drop to $2.85 in the U.S. at Start of April

20 hs ago

Save

Big Stock Market Rally Holds on Gains Wednesday Morning

1 day ago

Save

Broadcom up 4.5% on Major Semiconductor Reversal

2 days ago

Save