Dow Jones, S&P 500 and Nasdaq futures are currently pointing to a sharply lower open on Thursday, with stocks likely to give back ground after moving substantially higher over the two previous sessions.
Renewed concerns about an escalation of the conflict in the Middle East are likely to weigh on Wall Street following President Donald Trump’s primetime address Wednesday night.
Trump’s speech largely echoed his recent comments and Truth Social posts, but traders seem to be responding negatively to the tone of his remarks.
The president reiterated his claim that the war will be over “very shortly” but also said the U.S. is going to hit Iran “extremely hard over the next two to three weeks,” bringing the country “back to the stone ages where they belong.”
Trump also once again called on other countries to “build up some delayed courage” and take control of the vital Strait of Hormuz, claiming, “The hard part is done.”
After moving sharply lower over the past two days amid optimism an end to the conflict, crude oil prices have skyrocketed in reaction to Trump’s speech, with U.S. crude oil futures spiking by more than 11 percent.
“Investors didn’t get what they wanted from President Trump’s address to the American people and have reacted accordingly,” said AJ Bell investment director Russ Mould.
He added, “Famously, uncertainty is kryptonite for the markets and between the contradictory messages from Trump, disputed claims on both sides, and the lack of clarity on a plan which can provide a resolution to the conflict they are getting a heavy dose of it right now.”
Stocks moved mostly higher during trading on Wednesday, adding to the substantial gains posted during Tuesday’s session. The major averages all moved to the upside, with the tech-heavy Nasdaq posting a standout gain.
The major averages gave back some ground in afternoon trading after a morning rally but remained firmly positive. The Nasdaq jumped 250.32 points or 1.2 percent to 21,840.95, the S&P 500 climbed 46.80 points or 0.7 percent to 6,575.32 and the Dow rose 224.23 points or 0.5 percent to 46,565.74.
The extended the rally on Wall Street came amid optimism about an end to the U.S. war with Iran following the latest comments by President Donald Trump.
Speaking to reporters at the White House on Tuesday, Trump said he expects U.S. military forces to leave Iran in “two or three weeks.”
The president argued that the U.S. does not have to reach a negotiated settlement to end the war with Iran, calling a deal “irrelevant” because “everything’s been bombed out.”
Trump later claimed in a Truth Social post this morning that Iran’s “new regime president” has asked for a ceasefire, which he said the U.S. would consider when the Strait of Hormuz is “open, free, and clear.”
However, in response to Trump’s post, a report from Al Jazeera said an Iranian official clearly denied that Tehran has requested a ceasefire.
Gold stocks extended Tuesday’s rally as the price of the precious metal continued to surge, driving the NYSE Arca Gold Bugs Index up by 4.3 percent.
Substantial strength was also visible among airline stocks, with the NYSE Arca Airline Index soaring by 2.8 percent.
Semiconductor, networking and computer hardware also saw significant strength, contributing to the jump by the tech-heavy Nasdaq.
Steel, financial and pharmaceutical stocks also showed strong moves to the upside, while energy stocks came under pressure amid the steep drop by the price of crude oil.