Dow Jones, Nasdaq bounce back after Iran messages scandal from Heggsett Active uses images taken from Shutterstock
“WTI oil prices fell below $85 on Tuesday after hovering near $120 on Tuesday, as President Donald Trump signaled that the war with Iran could end sooner than expected, promised maritime protection for tankers in the Strait of Hormuz and the G7 said it was ready to release strategic oil reserves.”
Analysts said Trump’s comments were likely to “reduce supply fears” among investors.
U.S. existing home sales rose to 4.09 million units in February at a 1.7% annual pace, partially recovering from January’s sharp decline, although weather likely remains a limiting factor.
Despite the hike, home buying activity is expected to remain sluggish due to higher mortgage rates, which have risen above 6% after briefly dipping into the high-5% range. Single-family home inventories remained tight at 1.18 million, 18% below February 2019 levels.
Home price growth remains moderate, with the median single family home price rising just 0.2% annually. Regional trends show strong gains in the Northeast (+4.0%) and Midwest (+2.3%), while the South (+0.2%) and West (-2.2%) saw slower or negative appreciation.
Small business optimism fell for a second month in February as companies cut capital spending and hiring plans, according to Wells Fargo, driven by weaker demand for workers than job losses.
Only 15% of companies indicated the quality of work as their biggest concern, which is the lowest since April 2020.
Despite the slowdown, small businesses remain largely positive. A net 15% of owners said current conditions are favorable for expansion, while 18% expect favorable conditions in the next six months – both above the pandemic-era average.
Analysts at Wells Fargo noted that strong earnings and sales appeared to support an overall positive economic outlook, highlighting the disconnect between labor market performance and overall economic health.
Wall Street opened mixed, with the Dow and S&P 500 down 0.4% and 0.25%, respectively, while the Nasdaq was in the green, as technology and energy stocks weighed on sentiment.
Salesforce led the Dow fallers with a 3.3% decline, followed by IBM down 1.5% and Chevron down 1.2%, with major energy declines reflecting a continued decline in oil prices from Monday’s unusual highs.
Disney, Microsoft, Visa and Nike were all down around 0.7-0.9%.
Neil Wilson, market analyst at Saxo, said Defense Secretary Hessgate’s comments about the heavy-handed strikes by the US “were a different tone to Trump’s comments, which appear to be more about appeasing the market than reflecting military reality”.
He noted that crude oil prices are starting to rise following drone attacks around the UAE’s Royse oil refinery in Abu Dhabi, suspending installation operations as a precaution.
“The April first-month contract is trading at a $5 premium to the May contract, indicating how the market remains calm about the path for crude oil despite intense near-term pressure. The January 2027 contract is trading at $74 as the futures curve lags.”
US futures pointed to a soft open on Wall Street on Tuesday, as markets adjusted their reaction to the US government’s comments on the Iran conflict.
Dow Jones and S&P 500 futures were down 0.3% and the Nasdaq fell 0.2%, with big gains ahead of fresh signs from Washington that suggested the war with Iran is far from over.
Stocks rallied a day earlier today, recovering from early losses as oil prices fell after comments from Donald Trump suggested the conflict with Iran may be ending sooner than expected.
President Trump suggested that the war with Iran could end “very soon”, that “I think the war is very complete, very much” with the United States “long ahead of schedule”.
The major New York stock market indexes ended strongly higher, with the Nasdaq rising 1.4% to 22,696, while the S&P added 0.8% to close at 6,796, the Dow Jones added 0.5% to 47,741 and the Russell 2015 added 0.5% to 2015.
European stocks, which opened sharply on the back of Trump’s deescalation signals, also pared some of their gains, although the FTSE 100 and DAX remained firmly in the green.
The change in mood on Tuesday followed comments from Defense Secretary Pat Hegseth, who said Tuesday would be “our toughest day of strikes in Iran”.
At a press conference at the Pentagon, Hegseth said it would be “more fighter, more bomber, more attack, more sophisticated intelligence and better than before.”
On the other hand, he noted that in the last 24 hours, Iran had seen “the lowest number of missiles they are capable of firing” and stressed that the current administration has no plans for a “nation-building” campaign.
WTI crude futures, which had fallen above $116 a barrel on Monday to $82 after Trump’s comments, rose above $90.
Reports of an oil tanker explosion near Abu Dhabi are raising nerves, although G7 energy ministers will discuss the possible release of emergency oil reserves later in the day.
Separately, Bill Ackman’s Pershing Square has filed for a NYSE IPO with a dual listing structure, securing $2.8 billion in commitments ahead of the offering.
And Elon Musk’s rocket and satellite maker SpaceX is leaning toward listing its shares on the Nasdaq, Reuters reported, in what is expected to be the largest initial public offering of all time.
