- The S&P 500 has plunged Friday 0.2% when investors were awaiting the next decision of President Donald Trump on Iran and a possible reduction in the rates of the federal reserve in July.
The markets closed a dull week while the main stock indices are slightly lowered or stayed flat on Friday. The S&P 500 posted a daily drop of 0.2% and a weekly drop by 1.3%. The NASDAQ dropped by 0.5% and the Dow Jones was essentially stable with a daily gain of 0.1%.
The end of the short week of negotiation – the United States was closed Thursday in accordance with Juneteenth – came when the White House said Thursday evening that President Donald Trump would decide in the two weeks of Iran’s strike. The commander-in-chief had weighed military action after Israel, a key American ally in the Middle East, began to exchange missiles and drone strikes with the Islamic Republic last Thursday.
“We know exactly where the so-called” supreme chief “is hiding on Wednesday on Wednesday, Trump published on social networks on Wednesday, referring to the Ayatollah of Iran Ali Khamenei. “It is an easy target, but it is sure there – we are not going to take it out (kill!), At least not for the moment.”
A potential American entry into the conflict between Israel and Iran could increase tensions in the region and further disrupt the oil trade. Oil prices dropped on Friday, in a probable sign that traders were relieved that Trump decided to delay conflicts with Iran for two weeks.
“This means two weeks of uncertainty for the financial markets, but investors are still inclined to see the Middle East conflict as a local and non-global economic problem,” said Paul Donovan, UBS Global Wealth Management, in an analyst’s note on Friday.
Meanwhile, Christopher Waller, member of the Council of Governors of the Federal Reserve, said on Friday that the US central bank could reduce interest rates in July. “It would be in my opinion that the committee would accept it or not,” said Walker in an interview with CNBC.
On Wednesday, the Fed decided to hold stable interest rates for its fourth consecutive meeting. Meanwhile, Trump put pressure for drops of interest since he took office in January. “Uncertainty about economic prospects has decreased but remains high,” the Fed wrote in a statement on Wednesday.
While the central bank adopted a cautiously optimistic approach to the American economy, some analysts were more pessimistic.
“The ignition of the unifamilial construction deepens, another wind from activity and employment,” wrote Samuel Tombs and Oliver Allen, economists from the Pantheon macroeconomics, in a research note on Friday.
