Nasdaq Soars After Trump Announces Iran Sanctions
Remarks by President Donald Trump, who suggested that the US and Iran were refraining from further military action, resulted in US stocks posting solid gains after overnight losses.
The Nasdaq soared to a new record close that day, while the Dow Jones Industrial Average and S&P 500 finished close to their own peaks. Every sector in the S&P 500 railed, with the exception of energy and utilities, which fell in line with oil prices.
Shortly after President Trump finished his statement about Iran’s attack on two Iraqi bases housing military personnel, the Dow Jones Industrial Average ended the session up 161.41 points, or 0.6%, to 28,745.09.
President Trump told the press: “The United States will immediately impose additional punishing economic sanctions on the Iranian regime. These powerful sanctions will remain until Iran changes its behaviour.”
In comparison to the Dow Jones Industrial Average, the Nasdaq Composite Index finished up 60.66 points, or 0.7%, at 9,129.24, while the S&P 500 gained 15.87 points, or 0.5%, to close at 3,253.05.
What’s Driving The Market?
Investor sentiment rallied after President Trump confirmed that only ‘minimal’ damage was done to the military facilities in Iraq and that no US casualties were sustained.
He tweeted: “All is well! Missiles launched from Iran at two military bases located in Iraq. Assessment of casualties & damages taking place now. So far, so good! We have the most powerful and well equipped military anywhere in the world, by far!”
However, Iran’s response to the killing of a top general by the American forces did briefly rattle financial markets, but moves in bonds, commodities and stocks quickly subsided as investors reconsidered the chances of a wider conflict.
Marios Hadjikyriacos, the investment analyst at XM, said: “Markets initially reacted [to the attacks] in classic risk-off fashion, with Asian stock markets getting hammered and Wall Street futures falling sharply, as safe havens such as the Japanese yen and gold roared higher.
“Yet, these moves retraced in the following hours. Much of this market serenity is owed to both sides signalling they don’t want to escalate matters any further.”