Dow Jones and Nasdaq futures called higher despite mixed message on Iran war
US stocks started higher, but have flattened off, with the tech-heavy Nasdaq now a handful of points in the red.
The Dow Jones is up 0.4% at above 45,350, while the S&P 500 has added 0.2%.
Among Nasdaq 100 stocks, fallers are being led by semiconductor and storage stocks, Marvell, Western Digital and Micro down the most, while chipmakers and equipment suppliers including Intel, ASML and Applied Materials are also under pressure.
A short while ago, Donald Trump, in what are starting to feel like customary pre-Wall Street open Truth Social posts, said the US is in “serious discussions” with a “new and more reasonable” Iran regime.
“Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately ‘Open for Business,’ we will conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet ‘touched.’
“This will be in retribution for our many soldiers, and others, that Iran has butchered and killed over the old Regime’s 47 year ]Reign of Terror’,” he said in the post.
US stock futures were pointing to a firmer open on Monday, as oil price rises were small and bond markets eased slightly, despite more mixed messages on the fifth week of the war in the Middle East from Donald Trump and Iranian officials.
Dow Jones, S&P 500 and Nasdaq futures were all up around 0.6%, after a week of heavy selling left all three indices nursing losses of between 2.8% and 5.25%.
The Nasdaq bore the brunt of the selloff at the end of last week, falling 2.15% to close at 20,948, while the Dow shed more than 450 points to finish at 45,166. The S&P 500 dropped 1.7% on the day.
Four weeks into the Middle East conflict, the S&P and Dow are both down around 7.5% from their recent highs, with the Nasdaq off 7.9%.
European markets have opened higher on Monday, with London’s FTSE up 0.9% and Germany’s DAX gaining 0.3%, while Asian trading was more cautious, with Japanese and Indian benchmarks falling more than 2%, though Shanghai stocks edged up slightly.
Oil continued to climb, with WTI crude rising 1.7% to $101.30 a barrel as concerns around the Gulf persist.
On the diplomatic front, foreign ministers from Pakistan, Egypt, Saudi Arabia and Turkey met in Islamabad on Sunday to discuss reopening the Strait of Hormuz, the narrow waterway through which around a fifth of the world’s oil passes.
Secretary of State, Marco Rubio, told G7 members at the weekend that they should expect the war to continue for an additional two to four weeks.
Iran showed little sign of softening its position on Monday, however, with its foreign ministry dismissing US proposals to end the conflict as “unrealistic, illogical and excessive.”
Trump suggested to reporters on Air Force One that a deal with Iran was possible. “I think we’ll make a deal with them, I’m pretty sure. But it’s possible we won’t.”
But his preference would be to “to take the oil in Iran”, he told the Financial Times, suggesting ground troops seizing Kharg Island, Iran’s main crude export terminal.
The Wall Street Journal reported that Trump is weighing a military operation to extract Iran’s uranium stockpiles, adding to growing signals that the White House is considering direct military intervention beyond the current airborne conflict.
Market analyst David Morrison at Trade Nation noted that sharp selling at the end of last week came as investors were anxious to reduce their exposure “ahead of a weekend in which anything could happen”.
“It’s also worth noting that tomorrow marks the end of the first quarter, and this in a holiday-shortened week which, nonetheless, has an important Non-Farm Payroll release on Good Friday.”