Markets ended in plus in early trading after US and Iran exchange strikes

The U.S. stock market ended the volatile session on June 23 with growth of about 1%, although there were fears of a collapse due to U.S. strikes on Iran's nuclear infrastructure and a retaliatory attack on a U.S. military base in Qatar. Oil, on the other hand, has fallen sharply in price. Investors are predominantly concerned about oil supplies and now believe the threat of blocking the important Strait of Hormuz has diminished and an escalation of the conflict would have limited consequences, analysts said,

- The S&P 500 broad market index rose 1 percent to 6,025 points on Monday, rebounding from Friday's decline.

- The Nasdaq Composite index of technology stocks also added 1 percent to close at 19,631 points.

- The blue-chip index Dow Jones Industrial Average climbed 0.9 percent to nearly 42,582 points.

- The Russell 2000 index of small-capitalization companies added 1.1 percent to 2132.7 points.

- All of the «Magnificent Seven» companies except Amazon and Alphabet ended the day on the plus side. The best performer was Tesla (+8.2%), which on Sunday for the first time launched its robot cabs in Texas. Shares of oil companies Chevron and Exxon Mobil fell 1.8% and 2.6%, respectively. Shares of defense Lockheed Martin and Northrop Grumman rose 0.4%.

- U.S. oil WTI WTI decreased by 9.8% at the moment, while quotes for Brent were down 9.7% to below $70 a barrel.

- The Bloomberg dollar index was down 0.2 percent, while spot prices for gold rose the same.

- As concerns about the imminent threat of inflation from energy prices have eased, yields on Treasury bonds have fallen, wrote Bloomberg.

The U.S. strikes overnight Sunday hit three nuclear sites in Iran. That came as a surprise to investors who had expected diplomatic efforts to continue, noted CNBC. Markets were concerned before trading on Monday about a possible Iranian response, with oil prices jumping and U.S. stock futures falling on concerns that Tehran could close the Strait of Hormuz, through which about a quarter of the world's oil supply passes.

Iran on Monday attacked a U.S. base in Qatar with missiles. U.S. indices lost all growth after that and started to fall, but very quickly changed the trend and came back to the plus side. The Qatari authorities said that the attack was repulsed, no one was killed or injured. This was later confirmed by U.S. President Donald Trump;

«Iran officially responded to our destruction of their nuclear facilities with a very weak response that we anticipated and effectively repelled,» Trump wrote on the Truth Social network «Fourteen missiles were fired, 13 of them were shot down, and one we 'let go' as it flew in a harmless direction.» The U.S. president said Iran had «vented its emotions» and thanked Tehran for warning of the attack, which «avoided the loss of lives.»

Investors saw this reaction from Iran as softer than expected. Oil fell in price as traders bet that crude supplies would not be significantly disrupted by the ongoing conflict, CNBC said.

Treasury yields fell on Monday after Michelle Bowman, a member of the Fed's Board of Governors, said on Monday that she may support a key rate cut as early as July. After similar «soft» comments from another Fed member, Christopher Waller, last week, Bowman's remarks signaled growing support within the regulator for monetary easing, wrote The Wall Street Journal.

- «Markets only care about oil supply disruptions - and as long as that can be avoided, we're seeing a surge in quotes,» said Harris Financial Group managing director Jamie Cox to CNBC. - Whether President [Trump] exaggerated the effectiveness of the strikes or not, Iran's nuclear program has rolled back decades.»

- «Geopolitical risks in the Middle East have certainly increased, but we still believe that because of the extreme asymmetry of the conflict (the military capabilities of Iran and its proxies are severely compromised), Tehran's relative isolation (virtually no allies ready to come to the rescue), and ample global oil reserves, the consequences will be limited,» wrote Vital Knowledge's Adam Crisafulli in a note quoted by CNBC.

- While U.S. strikes on Iran's nuclear facilities remain in the spotlight, corrections triggered by geopolitics tend to be short-lived, consider strategists at Morgan Stanley. «History shows that most sell-offs amid geopolitical events are short-lived and moderate. Oil prices will determine whether volatility persists,» said in a note from analysts led by Michael Wilson that was cited by Bloomberg.

According to Morgan Stanley, past geopolitical crises have indeed caused short-term fluctuations in the stock market, with the S&P 500 Index averaging gains of 2%, 3% and 9%, respectively, one month, three months and one year after the events.

This article was AI-translated and verified by a human editor