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US Stocks Turn Higher; Trump Speech to Set Tone in Financial Markets

James Hyerczyk

The major U.S. stock index futures contracts are trading higher shortly before the cash market opening after plunging earlier in the session in response to a rocket attack on an Iraqi airbase that hosts American troops.

Investors were initially rattled late Tuesday after U.S. military officials told news outlets the Al Asad airbase, which is located in western Iraq, had come under attack, with multiple projectiles hitting it.

At 11:59 GMT, March E-mini S&P 500 Index futures are trading 3241.25, up 6.00 or +0.19%, up from a low of 3181.00. March E-mini Dow Jones Industrial Average futures are at 28521, down 5 or -0.02%. It hit a low of 28084 earlier in the session. March E-mini NASDAQ-100 Index futures are at 8867.25, up 14.25 or +0.16%. This is up from an intraday low of 8678.00.

Pair of Tweets Calm Traders

The indexes hit bottom and started to claw back losses shortly after a pair of tweets from the Iranian Foreign Minister and the U.S. President.

Iranian Foreign Minister Mohamad Javad Zarif said via Twitter that “we do not seek escalation or war, but will defend ourselves against any aggression.”

U.S. President Donald Trump tweeted, “All is well!” He also added that an assessment of casualties was taking place.

Other Reasons for the Turnaround

Firstly, investors around the globe have been bracing themselves for retaliation and perhaps the start of a bigger conflict between Iran and the United States since last Friday’s U.S. airstrike that killed a high ranking military official.

Secondly, so far there were no reports of casualties. Iran reported 80 dead, but how would they know? They also offered no evidence of this claim. Furthermore, they needed something to tell their citizens.

Thirdly, the attacks did not center on oil production facilities or oil infrastructure.

Trump to Address the Nation

Traders are anticipating volatility when President Trump addresses the nation at about 14:00 GMT. Trump’s message could set the tone in the financial markets the rest of the session.

Trump may have helped calm the markets according to some.

CNBC writes that “The reassuring tone of Trump’s tweet marked an unexpected shift away from the harsh rhetoric the president has used in recent days to characterize tensions with Iran, which escalated following a U.S. strike that killed Iranian General Qasem Soleimani.”

However, Trump could trigger more selling if he repeats comments he made earlier on Tuesday. Hours before the Tuesday attacks, Trump told reporters at the White House that “if Iran does anything that they shouldn’t be doing, they’re going to be suffering the consequences and very strongly.”

Trump also said the United States was “totally prepared” for Iran to retaliate, and “we’re prepared to attack if we have to as retribution.”

This article was originally posted on FX Empire

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