Trump surprised everyone by escalating attacks in Iran. Oil prices soared, stocks swooned at the open, and then went green in 90 minutes as the prospects of ending things soon left investors willing to hold their nose and not to panic sell into such a sharp pullback, but instead continue to buy with a vision of where we should be going when things end in Iran.
WTI crude oil jumped to almost $114/bbl, while Brent crude only got as high as $109.7, a reversal of the usual relationship where Brent is typically several dollars higher. Futures contracts for oil delivery also rose, but not nearly as much. By 10:00 am ET, the prices had declined to lower levels.
Interest rates had jumped after Trump spoke last night, with the US 10-year rising from yesterday’s close of 4.32% to 4.38% but fell after the open and is now down to 4.3%. The 2-year followed the same path; +6bps overnight, now flat with yesterday’s close of 3.80%.
It clearly remains a volatile situation, but it’s encouraging that the dip buyers are clearly back and seem to be willing to deem the oil shock as temporary. The rest of the world is lower today due to the higher oil prices, perhaps because the U.S. energy independence makes us less vulnerable to outright shortages.
The markets are closed for Good Friday tomorrow – it’s going to be a very long weekend for investors in a period of such high volatility.
Oil Surges, Stocks Swing, and Dip Buyers Return After Trump’s Iran Move
