US Futures Slip as Iran Ceasefire Cracks Early

Quick overview

US stock futures dipped a bit lower on Wednesday evening as the markets tried to wrap their heads around the latest tension surrounding the 2 week ceasefire between the US and Iran . Futures pulled back after a day on Wallstreet that saw the Dow jump its biggest single day in over a year partly due to renewed hopes for peace in the Middle East.

The S&P 500 futures had dropped 0.2% to 6,808.50 , Nasdaq 100 futures slipped 0.25% to 25,012.0 and Dow Jones futures took a 0.2% slide to 48,060.0 . Investors are trying to weigh up the risks of geopolitics against the more recent gains, with attention currently on Iran’s claims that the US and Israel are not sticking to the ceasefire agreement.

Iran claims Ceasefire is being broken, Lebanon Dispute Heats Up

At first it looked like the ceasefire was working a bit, but Iran yesterday accused the US and Israel of breaching several parts of their 10 point peace plan. The main flashpoint remains in Lebanon though, where Israel has kept up its attacks on Hezbollah strongholds. Tehran’s saying it’s unreasonable to try and hammer out a deal without including Lebanon in the ceasefire.

• Iran shut the Strait of Hormuz temporarily after a recent Israeli attack, which is a 180 from where they were just saying the strait was a safe passage during the ceasefire.
• The White House came out and said Lebanon wasnt included in the original agreement. Israel for their part confirmed they will continue to take action against Hezbollah.

The US and Iran are scheduled to have another round of ceasefire talks in Pakistan later this week but it remains to be seen what they will actually be discussing. The Iranians have been pretty resistant to Washington’s calls to stop enriching uranium and hand over their uranium stockpile.

Wall St rallied hard on Initial Ceasefire Optimism

Markets rallied hard on Wednesday after the ceasefire announcement, finally ending a near six week conflict in the region.

• The S&P500 shot up 2.5% to 6,782.96
• The Dow Jones jumped 2.9% to 47,909.92
• The NASDAQ Composite surged 2.8% to 22,635.0

Tech stocks led the charge with chipmakers outperforming – the Philadelphia Semiconductor index soared by over 6% , thanks to some big players like Micron technology, NVIDIA and Intel. Samsung electronics also came out with a forecast for some strong first quarter earnings for memory chips, which is a sign that demand for tech is picking up.

Oil prices make a comeback as Ceasefire uncertainty grows

Oil fell initially with news of the ceasefire but then recovered some of its losses as Iran hinted that this could lead to disruptions to the Strait of Hormuz. Its already triggered concern among investors that rising oil prices could spark some inflation, something that was highlighted in the Federal Reserves March minutes that were released on Wednesday. The Fed said persistent energy costs could put some upward pressure on interest rates in the coming months, which adds another layer of uncertainty to global markets.

Market Direction and Key Takeaways

Investors are now stuck trying to balance their cautious optimism about the ceasefire with all the geopolitical and economic risks:

• Iran’s insistence that Lebanon should be included in the ceasefire could make things a lot more complicated.
• Wall St is still feeling pretty good about tech stocks and chipmakers.
• The volatility in oil prices and the Fed’s signals on interest rates could help shape the markets direction in the weeks to come.

With futures just hovering slightly lower the market is keeping a close eye on the talks between Iran and the US , energy market movements and what the Fed is saying , to get a better idea of how long the rally on Wall St will last.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

Asian Currencies Jump as Iran Ceasefire Pulls the Dollar Lower

22 hours ago

Save

Bitcoin Hits $72.7K on Trump’s Iran Ceasefire Announcement, Marking 3-Week High

1 day ago

Save

Ethereum Price Prediction: Can ETH Stay above $2K?

1 day ago

Save