(April 22): US stock futures climbed after President Donald Trump said he’s extending the ceasefire deal with Iran until talks conclude. Oil held a two-day gain.
Contracts for the S&P 500 gained 0.4% in early trading. The benchmark index lost 0.6% and the dollar climbed on Tuesday amid reports that Iranian officials refused to attend negotiations and Vice President JD Vance put off a planned trip to Pakistan. Sydney, Tokyo and Hong Kong futures were down.
West Texas Intermediate traded above US$90 a barrel in early trading, after adding almost 10% in the prior two sessions.
Trump said Tuesday that while the US would hold off on fresh attacks, it would maintain its blockade on the key Strait of Hormuz, which remains at a virtual standstill. And that’s just one of the unresolved issues, along with the Islamic Republic’s nuclear capabilities and Israel’s military operation in Lebanon.
“Waiting in cash for the all-clear sign is never a profitable strategy, but there are plenty of risks ahead,” said Chris Zaccarelli at Northlight Asset Management. “So it also doesn’t make sense to move to a high risk-taking posture either.”
Meanwhile, Kevin Warsh, Trump’s nominee to lead the central bank, noted the Federal Reserve needed a new framework for dealing with persistent inflation, without offering more specifics. He also said the US president has not asked him to commit to making certain rate decisions.
See also: US stocks muted as traders look ahead to Warsh, Iran updates
“The president nominated me for the position, and I’ll be an independent actor if confirmed as chairman of the Federal Reserve,” Warsh added.
In theory, stocks and bonds should like the messages of independent thinking and inflation vigilance, noted Steve Sosnick at Interactive Brokers
“From a stocks viewpoint, some of the lack of enthusiasm might stem from the seemingly lower likelihood of accommodative monetary policies,” he said. “From a bond viewpoint, Warsh reaffirmed his long-held opinion that the Fed’s balance sheet is too large. Shrinking the balance sheet would necessitate fewer holdings of Treasuries, particularly of the longer-dated variety.”
See also: Stocks fall, oil jumps on doubts over peace deal
Traders also parsed the latest economic data. US retail sales soared by the most in a year, suggesting consumers continued to spend on a wide array of merchandise despite a surge in gasoline prices sparked by the war.
Uploaded by Isabelle Francis
