Benchmark indices on Wall Street ended lower on Thursday, March 19, not before recovering from the lows of the day as oil prices eased on remarks from both US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu.
At one instance during the session, the Dow Jones reversed losses of as much as 500 points, nearly turned positive, before the recovery was sold into again during closing. The index eventually ended 200 points down. The S&P 500 and Nasdaq also recovered from the lows of the day, but ended with losses of 0.3% each. Futures this morning are trading with modest gains.
Oil prices eased after re-testing the war high of $119 a barrel after Israeli PM Benjamin Netanyahu said that Israel will not attack Iran’s energy infrastructure again after a rare public rebuke by US President Donald Trump. US crude prices are down 2% this morning. Netanyahu also said that the war may end “sooner than people think”, although he did not share a definitive timeline for the same.
The cool-off in oil prices also led to a cool-off in the US Dollar index, which slipped below the mark of 100 again.
Treasuries also staged a rebound from the lows after worries that major central banks may be forced to tighten policy to keep inflation in check. Both Bank of England and the European Central Bank left rates unchanged last evening, with traders now factoring in at least two rate hikes by the end of the year for both.
“All the near-term action depends on the Strait opening,” said Scott Wren at Wells Fargo Investment Institute. “We think it opens in a matter of weeks, not months.”
Wall Street will also see the quarterly “triple-witching” event take place today, with notional options worth nearly $5.7 trillion tied to stocks, indices and ETFs expiring simultaneously.
Sentiment is likely still leaning negative, with more downside in store, according to Wren at Wells Fargo Investment Institute. “We see a pullback in the 7-10% range from the record high as a good opportunity to step in,” he added.
(With Inputs From Agencies)