Trump says Iran war will end soon, US stock futures rise, oil prices fall

Investing.com - U.S. stock index futures rose on Tuesday as President Donald Trump stated that the Iran war is expected to end soon, easing investor tensions.

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As of 6:00 a.m. Eastern Time (6:00 p.m. Beijing Time), Dow futures increased by 145 points, up 0.35%, S&P 500 futures rose by 17 points, up 0.3%, and Nasdaq 100 futures gained 84 points, up 0.3%.

On Monday, Trump spoke at his golf club in Florida, saying he expects the attack to “end very soon,” and threatened that if Iran tries to block oil supplies through the Strait of Hormuz, the U.S. will launch more attacks. The Strait of Hormuz is a critical waterway, with one-fifth of the world’s oil passing through it.

Trump added that he has considered controlling the strait, as disruptions caused by conflicts have disturbed global markets and raised concerns about soaring global inflation.

However, Trump stated that the U.S. “can go further, and we will go further.” Specifically, the president said that if Iran’s new Supreme Leader Mujeh Tabataba’i does not accept Washington’s demands, he will kill Khamenei. Khamenei is the son of Ali Khamenei, who was killed in U.S.-Israel strikes at the start of the conflict in February. His election is seen as a possible continuation of Tehran’s hardline stance.

Iranian leadership reportedly said that if the U.S. and Israel continue attacks, they will not allow “a single barrel of oil” to pass through the strait. Iran’s foreign minister also denied the possibility of ceasefire negotiations with Washington.

Meanwhile, Israeli Prime Minister Benjamin Netanyahu said the military operation “is not finished,” indicating Israel’s goal remains to dismantle Iran’s ruling clerical power.

On Tuesday, Iran launched new attacks against Persian Gulf countries, while Israel targeted targets in Lebanon, continuing strikes against Hezbollah positions supported by Tehran.

Market Volatility

On Monday, major Wall Street indices experienced significant swings amid turbulent trading, initially affected by the election of Iran’s new Supreme Leader Mujeh Tabataba’i (son of former leader Ali Khamenei). Investors worried this would solidify Iran’s hardline stance and reduce prospects for a quick end to the conflict.

Oil prices surged to around $120 per barrel, near the highest levels since 2022, mainly due to concerns over the ongoing disruption of key oil supplies through the Strait of Hormuz. One-fifth of the world’s oil passes through this waterway in southern Iran, making it a vital global supply route.

Bond yields also rose sharply, reflecting fears that the oil shock could trigger a surge in global inflation and possibly lead central banks to raise interest rates again.

BCA Research analysts stated in a report: “Global financial markets panicked on Monday, recognizing the danger of the long-term closure of the Strait of Hormuz.”

However, this highlighted how sensitive traders are to the evolving conflict in the Middle East. After Trump told CBS News that the war was “very complete, almost over,” these trends reversed. U.S. stocks closed higher, oil prices retreated, and bond yields declined.

On Tuesday, Brent futures fell 7.4% to $91.53 per barrel, while U.S. WTI crude futures dropped 6.9% to $88.24 per barrel.

According to The Wall Street Journal, energy ministers from the G7 developed economies will hold talks on Tuesday. G7 finance ministers earlier discussed releasing emergency oil reserves to stabilize the crude market.

Oracle Earnings Coming Soon

In earnings news, Oracle Financial Software will be in focus after the market closes.

The company was once seen as a small player in the cloud computing market, but its partnership with OpenAI has rapidly expanded its position, making it a key provider of computing power needed to support AI models.

However, investors are increasingly skeptical about Oracle’s plans to build large-scale data centers to serve OpenAI and other clients like Meta Platforms (Facebook’s parent company). In December, Oracle projected capital expenditures of $50 billion for the current fiscal year, up from an earlier estimate of $35 billion.

Oracle’s stock soared to about $328 in September, but as of Monday’s pre-market trading, it was at $151.56. The stock has fallen more than 22% this year.

Vital Knowledge analysts stated in a report: “Market sentiment around Oracle remains very cautious.”

They added that although the Iran conflict is currently the dominant topic, the rise of artificial intelligence and any news surrounding this emerging technology remain “the most powerful forces driving the S&P 500 across the entire market.”

This article was translated with the assistance of artificial intelligence. For more information, see our Terms of Use.