United States Fed Kugler Speech

US stocks pared their recent rally on Monday after Iran launched missiles at US bases in Qatar, yet benchmarks still remained comfortably higher as energy supplies remained secure. The S&P 500, Dow Jones and Nasdaq 100 all gained over 0.3%, shrugging off geopolitical jitters once it became clear that Iran would not disrupt tanker traffic through the Strait of Hormuz. Crude futures reversed their gains on reports that oil flows in the Persian Gulf would remain uninterrupted despite retaliatory strikes on Iranian nuclear infrastructure. Tesla led sectoral strength with an over 8% pop after rolling out its first driverless taxis, and AMD jumped 2.3% on a research upgrade. Energy majors ExxonMobil and Chevron pared early gains as oil prices eased, but the broader market held up on the back of resilient corporate news and the alleviation of near-term supply concerns.

Wall Street Pares Early Session Rally, Holds Gains

Brent crude oil futures extended their decline to the $74.5 per barrel threshold amid signs that Iran may refrain from targeting oil flows in the Persian Gulf as retaliation to strikes from the United States. Iran reportedly sent missiles to US bases in Qatar in response to the US's strikes at Iranian nuclear infrastructure over the weekend. Despite the escalation, oil tankers continued to navigate through the Strait of Hormuz and markets softened concerns that strikes would hamper the supply of oil, driving prices to fall sharply. Estimates indicate that over 20 million barrels per day of oil are shipped through the region, around 20% of global supply. Earlier, crude oil futures were up by over 6% but that rally was unwound as the market reassessed the risk of near-term disruption, waiting for Iran’s next move.

Brent Extends Pullback

WTI crude oil futures extended their decline to the $72 per barrel threshold amid signs that Iran may refrain from targeting oil flows in the Persian Gulf as retaliation to strikes from the United States. Iran reportedly sent missiles to US bases in Qatar in response to the US's strikes at Iranian nuclear infrastructure over the weekend. Despite the escalation, oil tankers continued to navigate through the Strait of Hormuz and markets softened concerns that strikes would hamper the supply of oil, driving prices to fall sharply. Estimates indicate that over 20 million barrels per day of oil are shipped through the region, around 20% of global supply. Earlier, WTI surged to as high as $74.3, hitting its highest level since January, but that rally was unwound as the market reassessed the risk of near-term disruption, waiting for Iran’s next move.

Crude Oil Falls Further as Tankers Navigate Hormuz

European stocks held most of their morning losses to close lower on Monday, pressured by a slight pivot towards safety as tensions in the Middle East escalated. The STOXX 50 dropped 0.2% to close at 5,222 and the pan-European STOXX 600 fell 0.3% to close at 535. US forces used bunker buster missiles to strike Iranian nuclear infrastructure over the weekend, its first direct attack in the current conflict, to open a new degree of escalation. Besides vowing to retaliate, Iran threatened to prohibit the passage of tankers through the Strait of Hormuz, but the constant flows of tankers through the chokepoint since yesterday prevented a rally in oil and gas prices. Novo Nordisk shares fell 5.3% after it ended its retail agreement through Hims & Hers. Also, insurers fell on risks of military action for tankers and infrastructure, with AXA and Munich Re dropping more than 3%.

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Wall Street Pares Early Session Rally, Holds Gains

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United States Fed Kugler Speech