Oil spikes, equity futures retreat as President Trump commits to hitting Iran “extremely hard” over the next two to three weeks
The ongoing war threatens to bring about an even more pronounced disruption to energy supplies, with negative ramifications for economic activity and financial markets.
West Texas Intermediate oil futures jumped more than 6% and US equity futures slid after President Donald Trump said the US military operations against Iran would continue over the next two to three weeks.
In his primetime address, the president said that the US would hit Iranian targets “extremely hard” during this period, and that he would also consider hitting Iran’s electric generation plants and energy infrastructure if he is unable to strike a deal with the country’s new leadership.
Trump added that America’s core strategic objectives were “nearing completion.”
The ongoing war threatens to bring about an even more pronounced disruption to energy supplies, with negative ramifications for economic activity and financial markets. The flow of oil through the Strait of Hormuz, a key chokepoint for energy shipments, has slowed to a trickle.
Though the thrust of these remarks were largely in line with what had been reported ahead of the speech, traders had been growing more optimistic about the prospect of an imminent wind-down to the kinetic conflict. The S&P 500 closed higher Wednesday, marking its best two-day stretch of gains since last May.
WTI futures, which had been trading around $98 per barrel ahead of the speech, broke above $104. S&P 500 equity futures turned from slightly positive to down 0.8% as traders digested the president’s address.
