Source: Fortune.com
Summary
US stock futures fell and oil prices rose after a weekend of fighting in the Persian Gulf, but investors remained calm. Dow Jones futures fell 0.19%, S&P 500 futures fell 0.27%, and Nasdaq futures lost 0.48%. US oil futures rose 3.2% to $73.70 a barrel, while Brent crude climbed 3.2% to $78.45. Bob McNally, founder of Rapidan Energy, said crude oil markets have been “blowing off this geopolitical risk for years” and the rise in prices was “pretty tame”.
Our Reading
The numbers tell one story.
Investors are calm despite the fighting in the Persian Gulf, with oil prices rising but not spiking. US Central Command announced another set of strikes on Iran, aimed at “degrading their ability to attack civilian mariners and commercial ships freely transiting the Strait of Hormuz.” The latest wave of attacks came after the Islamic Revolutionary Guard Corps targeted a commercial ship, prompting US forces to intercept an Iranian missile and drone. The US has demanded that freedom of navigation in Hormuz must be fully restored.
The situation is escalating, with increasingly violent skirmishes as Iran seeks to preserve its main source of leverage, namely the ability to effectively shut down Hormuz traffic. The conflict is becoming an undeclared naval war, which can escalate.
Author: Evan Null
