Even though oil prices dropped on Monday, global equities markets continued to rise as they ignored the impact of US strikes on Iranian nuclear installations, trading close to multi-month highs. Every major index on Wall Street was up, and nine of the eleven benchmark S&P 500 subsectors were also rising. The largest losers throughout the session were energy stocks.
The S&P 500 increased 0.48% to 5,996.40, the Nasdaq Composite increased 0.61% to 19,565.74, and the Dow Jones Industrial Average increased 0.17% to 42,279.55. European stocks fell 0.2 percent. Overnight, there was a 0.66% decline in MSCI’s broadest index of Asia-Pacific stocks outside of Japan. The MSCI index of global equities increased by 0.28%.
Iran reiterated its previous vows to strike back at the US. The shutdown of the Strait of Hormuz, a vital maritime route in the world’s oil commerce, was authorised by its parliament. According to Andrew Wells, chief investment officer of SanJac Alpha in Houston, “the higher market signals a risk-on sentiment, which is somewhat surprising considering we had a series of very volatile events over the weekend with US participation in the (Iran) bombing efforts with Israel.”
The lesson here is that since tariffs have been in place, these high-profile events—the so-called Liberation Day—have had less and less impact on the market. Futures for Brent crude dropped 0.83% to $76.37 per barrel.
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