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Yahoo
8 hours ago
- Business
- Yahoo
Investors are celebrating the Iran-Israel cease-fire. Here's why they shouldn't breathe easy just yet.
Investors are cheering the Iran-Israel cease-fire by scooping up stocks and selling gold. They may be celebrating prematurely as the peace may not last, commentators say. The US faces a "laundry list" of risks that threaten to damage its economy, one economist said. Investors are toasting the nascent Iran-Israel ceasefire by getting out of safe bets such as gold and piling into riskier assets such as stocks and crypto. They may be celebrating too soon. The S&P 500 closed nearly 1% higher on Monday, and futures trading on Tuesday point to further gains. The surge follows Iran firing missiles at a US military base in Qatar, and President Donald Trump declaring an end to the 12-day clash between Israel and Iran. Tehran effectively warned Qatar and the US that the missiles were coming, suggesting the launch was a largely symbolic retaliation to save face after the US bombed its nuclear facilities on Sunday. "Iran's telegraphed retaliation against the US had already been taken as a sign that de-escalation was the most likely path forward, which had helped lift US stocks, and the rally has extended," Matt Britzman, a senior equity analyst at Hargreaves Lansdown, said in a morning note. The Euro Stoxx 50 and Hong Kong's Hang Seng index both gained about 2% on Tuesday, as the world breathed a sigh of relief after fearing a major escalation and prolonged conflict in the region. The risk-on mood lifted bitcoin, which had dropped below $98,500 on Sunday, to near-record highs above $105,000. Brent crude, after soaring to $80 early Monday, has plunged by about 14% to below $70 as traders pared their bets on Iran closing the Strait of Hormuz and disrupting global oil flows. The fragility of the situation was evident on Tuesday after Israel responded to what it said was a missile launched by Iran. Tehran denied doing so, per reports from its state-run news agency. President Donald Trump said both countries had violated the cease-fire and told Israel not to drop more bombs. "If you do it's a major violation," he wrote on Truth Social. A prolonged spike in oil prices could fuel inflation and crimp economic growth, putting central banks in a bind. Raising interest rates could temper price growth but dampen growth further; cutting them could boost their economies but worsen inflation. Slimmer chances of an oil shock and renewed hopes for rate cuts have pushed down 2-year and 10-year US Treasury yields, which tend to track rate expectations, to their lowest levels since early May. The dollar, which jumped on Monday as investors banked on the greenback as a haven asset and priced in higher interest rates, ended the day lower as geopolitical headwinds faded. Gold, another popular assets during flights to safety, has also dipped. What does all that mean? It suggests investors are broadly shrugging off concerns of the Iran-Israel conflict engulfing other countries in the Middle East and roping in the US and other major players. They may be jumping the gun in assuming the threat has passed. "This truce is fragile," Nigel Green, the CEO of deVere Group, said in a morning note. "It's politically brokered and militarily uneasy. One wrong move and tensions could flare again, dragging markets down with them." Green said the deeper issue is the instability of a region that plays a critical role in global energy, security, and trade: "The Middle East remains a geopolitical powder keg, and history tells us that calm doesn't last." Peace may hold for now, but the US dropping bombs on Iran means the conflict has firmly joined Trump's tariffs on the "laundry list" of risks to the US economy, Ryan Sweet, chief US economist at Oxford Economics, told Business Insider ahead of the cease-fire. "I am worried. As an economist, I worry about everything." He underscored how foreign wars can affect the "collective psyche," with concern of higher gas prices in the future leading American consumers to save more by putting off big purchases and cutting back on non-essentials such as dining out. Those behaviors can have knock-on effects on economic growth and employment. Markets are signaling the US is in the clear, but the world can be much messier and unpredictable than investors might like. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
11 hours ago
- Business
- Business Insider
Investors are celebrating the Iran-Israel cease-fire. Here's why they shouldn't breathe easy just yet.
Investors are toasting the nascent Iran-Israel ceasefire by getting out of safe bets such as gold and piling into riskier assets such as stocks and crypto. They may be celebrating too soon. The S&P 500 closed nearly 1% higher on Monday, and futures trading on Tuesday point to a similar gain that could see it hit a new high. The surge follows Iran firing missiles at a US military base in Qatar, and President Donald Trump declaring an end to the 12-day clash between Israel and Iran. Tehran effectively warned Qatar and the US that the missiles were coming, suggesting the launch was a largely symbolic retaliation to save face after the US bombed its nuclear facilities on Sunday. "Iran's telegraphed retaliation against the US had already been taken as a sign that de-escalation was the most likely path forward, which had helped lift US stocks, and the rally has extended," Matt Britzman, a senior equity analyst at Hargreaves Lansdown, said in a morning note. The Euro Stoxx 50 and Hong Kong's Hang Seng index both gained about 2% on Tuesday, as the world breathed a sigh of relief after fearing a major escalation and prolonged conflict in the region. The risk-on mood lifted bitcoin, which had dropped below $98,500 on Sunday, to near-record highs above $105,000. Brent crude, after soaring to $80 early Monday, has plunged by about 14% to below $70 as traders pared their bets on Iran closing the Strait of Hormuz and disrupting global oil flows. Treasurys dip A prolonged spike in oil prices could fuel inflation and crimp economic growth, putting central banks in a bind. Raising interest rates could temper price growth but dampen growth further; cutting them could boost their economies but worsen inflation. Slimmer chances of an oil shock and renewed hopes for rate cuts have pushed down 2-year and 10-year US Treasury yields, which tend to track rate expectations, to their lowest levels since early May. The dollar, which jumped on Monday as investors banked on the greenback as a haven asset and priced in higher interest rates, ended the day lower as geopolitical headwinds faded. Gold, another popular assets during flights to safety, has also dipped. What does all that mean? It suggests investors are broadly shrugging off concerns of the Iran-Israel conflict engulfing other countries in the Middle East and roping in the US and other major players. They may be jumping the gun in assuming the threat has passed. 'Geopolitical powder keg' "This truce is fragile," Nigel Green, the CEO of deVere Group, said in a morning note. "It's politically brokered and militarily uneasy. One wrong move and tensions could flare again, dragging markets down with them." Green said the deeper issue is the instability of a region that plays a critical role in global energy, security, and trade: "The Middle East remains a geopolitical powder keg, and history tells us that calm doesn't last." Peace may hold for now, but the US dropping bombs on Iran means the conflict has firmly joined Trump's tariffs on the "laundry list" of risks to the US economy, Ryan Sweet, chief US economist at Oxford Economics, told Business Insider ahead of the cease-fire. "I am worried. As an economist, I worry about everything." He underscored how foreign wars can affect the "collective psyche," with concern of higher gas prices in the future leading American consumers to save more by putting off big purchases and cutting back on non-essentials such as dining out. Those behaviors can have knock-on effects on economic growth and employment. Markets are signaling the US is in the clear, but the world can be much messier and unpredictable than investors might like.
Leader Live
12 hours ago
- Business
- Leader Live
Oil price falls back on Israel-Iran ceasefire
The cost of Brent oil fell by 4% in morning trading on Tuesday, settling at around 69 US dollars a barrel, having jumped to a five-month high on Monday. London's FTSE 100 Index also rebounded higher, up 40.5 points or 0.5% to 8798.5 in early trade following overnight gains in Asia, with Japan's Nikkei 225 up 1.1% and the Hang Seng in China ahead 0.7%. Investors were breathing a sigh of relief after US President Donald Trump announced a ceasefire had been brokered between Israel and Iran. The pound also rose, up 0.4% at 1.36 US dollars and 0.3% higher at 1.17 euros after both Iran and Israel confirmed they had agreed to stop fighting. Brent crude had shot up in price in recent days on the escalating conflict, with worries that Iran might seek to block oil being shipped through the all-important Strait of Hormuz. Panmure Liberum experts estimated that Brent crude could peak at 100 dollars (£74.43) a barrel thanks to severe disruption of the crucial waterway route, which they warned would send inflation soaring and hit stock markets hard. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: 'Despite the turmoil over the weekend, oil prices were quick to shift into reverse – an early signal that markets were betting on de-escalation sooner rather than later. 'Iran's response notably refrained from targeting any oil facilities or the important Strait of Hormuz, and the jump in prices over the past few days has mostly been erased now, positive news for the US administration and investors alike. 'Lower oil prices are a key component to keep inflation down and something the US Fed will have one eye on when thinking about whether to cut interest rates at the next meeting in July.' Among stocks in London, blue chip oil giants BP and Shell saw recent gains reversed on the crude price fall, down 5% and 4% respectively, which held back gains on the wider FTSE 100. Defence stocks were also lower, with aerospace group BAE Systems off 2%. Airlines and travel stocks were among those seeing shares rise after many carriers in the sector cancelled or rerouted flights to and from the Middle East due to the conflict. EasyJet and British Airways owner International Consolidated Airlines (IAG) led gains on London's blue chip share index, ahead by 6% and 5% respectively. But Kathleen Brooks, research director at XTB cautioned it was 'still a very fluid situation'. She said: 'Brent crude had rallied nearly 20% in the past month as a war premium was attached to the price of oil, which is now being unwound. 'However, if there are more signs that the ceasefire is not holding, we could see the oil price resume its uptrend.'
South Wales Argus
13 hours ago
- Business
- South Wales Argus
Oil price falls back on Israel-Iran ceasefire
The cost of Brent oil fell by 4% in morning trading on Tuesday, settling at around 69 US dollars a barrel, having jumped to a five-month high on Monday. London's FTSE 100 Index also rebounded higher, up 40.5 points or 0.5% to 8798.5 in early trade following overnight gains in Asia, with Japan's Nikkei 225 up 1.1% and the Hang Seng in China ahead 0.7%. Investors were breathing a sigh of relief after US President Donald Trump announced a ceasefire had been brokered between Israel and Iran. The pound also rose, up 0.4% at 1.36 US dollars and 0.3% higher at 1.17 euros after both Iran and Israel confirmed they had agreed to stop fighting. Brent crude had shot up in price in recent days on the escalating conflict, with worries that Iran might seek to block oil being shipped through the all-important Strait of Hormuz. Panmure Liberum experts estimated that Brent crude could peak at 100 dollars (£74.43) a barrel thanks to severe disruption of the crucial waterway route, which they warned would send inflation soaring and hit stock markets hard. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: 'Despite the turmoil over the weekend, oil prices were quick to shift into reverse – an early signal that markets were betting on de-escalation sooner rather than later. 'Iran's response notably refrained from targeting any oil facilities or the important Strait of Hormuz, and the jump in prices over the past few days has mostly been erased now, positive news for the US administration and investors alike. 'Lower oil prices are a key component to keep inflation down and something the US Fed will have one eye on when thinking about whether to cut interest rates at the next meeting in July.' Among stocks in London, blue chip oil giants BP and Shell saw recent gains reversed on the crude price fall, down 5% and 4% respectively, which held back gains on the wider FTSE 100. Defence stocks were also lower, with aerospace group BAE Systems off 2%. But Kathleen Brooks, research director at XTB cautioned it was 'still a very fluid situation'. She said: 'Brent crude had rallied nearly 20% in the past month as a war premium was attached to the price of oil, which is now being unwound. 'However, if there are more signs that the ceasefire is not holding, we could see the oil price resume its uptrend.'
Rhyl Journal
13 hours ago
- Business
- Rhyl Journal
Oil price falls back on Israel-Iran ceasefire
The cost of Brent oil fell by 4% in morning trading on Tuesday, settling at around 69 US dollars a barrel, having jumped to a five-month high on Monday. London's FTSE 100 Index also rebounded higher, up 40.5 points or 0.5% to 8798.5 in early trade following overnight gains in Asia, with Japan's Nikkei 225 up 1.1% and the Hang Seng in China ahead 0.7%. Investors were breathing a sigh of relief after US President Donald Trump announced a ceasefire had been brokered between Israel and Iran. The pound also rose, up 0.4% at 1.36 US dollars and 0.3% higher at 1.17 euros after both Iran and Israel confirmed they had agreed to stop fighting. Brent crude had shot up in price in recent days on the escalating conflict, with worries that Iran might seek to block oil being shipped through the all-important Strait of Hormuz. Panmure Liberum experts estimated that Brent crude could peak at 100 dollars (£74.43) a barrel thanks to severe disruption of the crucial waterway route, which they warned would send inflation soaring and hit stock markets hard. Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: 'Despite the turmoil over the weekend, oil prices were quick to shift into reverse – an early signal that markets were betting on de-escalation sooner rather than later. 'Iran's response notably refrained from targeting any oil facilities or the important Strait of Hormuz, and the jump in prices over the past few days has mostly been erased now, positive news for the US administration and investors alike. 'Lower oil prices are a key component to keep inflation down and something the US Fed will have one eye on when thinking about whether to cut interest rates at the next meeting in July.' Among stocks in London, blue chip oil giants BP and Shell saw recent gains reversed on the crude price fall, down 5% and 4% respectively, which held back gains on the wider FTSE 100. Defence stocks were also lower, with aerospace group BAE Systems off 2%. But Kathleen Brooks, research director at XTB cautioned it was 'still a very fluid situation'. She said: 'Brent crude had rallied nearly 20% in the past month as a war premium was attached to the price of oil, which is now being unwound. 'However, if there are more signs that the ceasefire is not holding, we could see the oil price resume its uptrend.'
