Stocks rise despite escalating tensions in Iran, as US Central Command says latest strikes are "completed"
Tensions in the middle east are reaching levels not seen since April. Markets don’t seem that bothered yet.
Stocks are rebounding and oil prices are ticking down despite the conflict in Iran reaching its testiest point in months.
The US and Iran exchanged attacks early Thursday morning after several days of hostilities, marking the biggest escalation since the early April ceasefire was announced. The US Central Command said that the latest "additional self-defense strikes" had been completed, catalyzing a bid for risk assets.
Futures for the S&P 500 and Nasdaq Composite were solidly in the green on Thursday after each index had shed 3.3% and 5.3% in the past week, respectively.
The key indices are getting a boost from major AI stocks — such as Sandisk, Applied Materials, Intel, Micron, and Corning — which are all up in premarket trading and on-track to return some of their recent loses. Investors also got an inflation report on Wednesday that came in largely in-line with expectations, with the key core inflation metric coming in a smidge cooler than economists had estimated, adding to reassuring economic data going into next week’s Federal Reserve meeting. Oracle signaled a further rise to capex and investment in AI infrastructure, which isn't hurting the AI trade either — although it is weighing on Oracle's shares itself.
Futures for Brent crude ticked down Thursday morning, suggesting investors don’t necessarily see the escalations translating to a scarcity of oil. Iranian officials said the Strait of Hormuz, a key trading route for oil tankers, would close on Thursday morning. US Central Command said Wednesday evening that the key waterway was still open.
Travel companies — such as Delta Air Lines, United Airlines, Royal Caribbean — which are sensitive to oil prices, also ticked higher in premarket trading on Thursday, giving back some of their recent losses.
