Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Oil slides, stocks soar as Mideast conflict worries fade

Stock MarketsJan 09, 2020 00:05
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Trader works at the New York Stock Exchange

By Herbert Lash

NEW YORK (Reuters) - Oil prices tumbled and equity markets soared on Wednesday after U.S. President Donald Trump said an Iranian missile strike on bases in Iraq had not harmed American troops and damage was minimal, showing Tehran wanted to de-escalate the Middle East standoff.

Iran fired missiles at military bases housing U.S. troops in Iraq in retaliation for last week's slaying by American drones of Iranian Major General Qassem Soleimani, a strike that raised fears of an escalating regional conflict.

"Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world," Trump said in an address to the nation.

The S&P 500 and Nasdaq stock indexes hit record highs after Trump's remarks and crude prices slumped, with U.S. benchmark West Texas Intermediate posting a 10% slide from a peak following the Iranian attack to after Trump spoke.

Gold had surged past $1,600 for the first time in nearly seven years in earlier trade before discarding gains as fears of a larger conflict abated, leading investors to move out of safe-haven assets as risk appetite returned.

The safe-haven yen fell from three-month highs against the dollar and the Swiss franc, another safe haven, also retreated. Brent oil futures slid off a four-month peak hit in frenzied early trade soon after the Iranian attack.

"Once Trump spoke and suggested that this is basically done for now, risk took off. We're back to the all-time highs in the S&P and accordingly so-called safe assets sold off," said Jacob Oubina, senior U.S. economist at RBC Capital Markets.

Iran's long-term goal of a sphere of influence might be jeopardized if it attacks too aggressively, said John Vail, chief global strategist at Nikko Asset Management in Tokyo.

"The impact on global risk assets will probably moderate from here as we are likely past the worst part of the crisis," Vail said in an e-mail. "Neither side wants a war."

U.S. stocks and MSCI's broad gauge of stock performance in 49 countries pared gains just before markets closed after news of two blasts, followed by sirens, were heard in Baghdad late on Wednesday.

MSCI's all-country world index (MIWD00000PUS) gained 0.10%, while bourses in Paris, Frankfurt and Milan rebounded.

On Wall Street, the Dow Jones Industrial Average (DJI) rose 161.41 points, or 0.56%, to 28,745.09. The S&P 500 (SPX) gained 15.87 points, or 0.49%, to 3,253.05 and the Nasdaq Composite (IXIC) added 60.66 points, or 0.67%, to 9,129.24.

The pan-European STOXX 600 index (STOXX) earlier closed up 0.17% and emerging market stocks lost 0.21%.

Spot gold fell 1% to $1,558.60 an ounce, having soared to $1,610.90 earlier in the session, its highest since March 2013.

U.S. gold futures settled 0.9% lower at $1,560.20.

A report showing a surprise build in U.S. stockpiles helped crude prices to fall.

The U.S. Energy Information Administration (EIA) said crude inventories rose by 1.2 million barrels during the week ended Jan. 3. [EIA/S] Analysts had expected a decline.

Brent (LCOc1) futures fell $2.83 to settle at $65.44 a barrel and U.S. WTI crude (CLc1) settled down $3.09 at $59.61 a barrel. WTI futures earlier hit $65.65, the highest since late April.

U.S. Treasury yields rose after yields on the 10-year U.S. Treasury note (US10YT=RR) overnight dropped to 1.705%, their lowest in more than a month, as worried investors bought U.S. government debt in a safe-haven move after the Iranian attack.

Benchmark 10-year notes (US10YT=RR) last fell 11/32 in price to yield 1.8615%, nearly 20 basis points above the low it hit overnight following the Iranian strike.

In Germany, yields on the 10-year government bond rose to -0.247%, still far below a seven-month high of -0.157% hit on Jan. 2, just before the killing of the Iranian general.

A higher-than-expected U.S. private payrolls number for December also boosted the dollar.

The ADP (NASDAQ:ADP) National Employment Report showed private payrolls jumped by 202,000 jobs after an upwardly revised gain of 124,000 in November. Economists polled by Reuters had forecast private payrolls of 160,000 last month following a previously reported 67,000 rise in November.

The dollar index (DXY), tracking the unit against six major peers, rose 0.3%, with the euro (EUR=) down 0.37% to $1.111.

The Japanese yen weakened 0.61% versus the greenback at 109.09 per dollar.

Oil slides, stocks soar as Mideast conflict worries fade

Related Articles

Generali expands presence in Malaysia via Axa deal
Generali expands presence in Malaysia via Axa deal By Reuters - Jun 22, 2021

MILAN/PARIS/KUALA LUMPUR (Reuters) - Italy's top insurer Generali (MI:GASI) has agreed to buy Axa's insurance assets in Malaysia and take full ownership of a joint-venture it runs...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email