US Stocks Open Lower as Iran Tensions Lift Oil, but Losses Are Limited

"US markets still reflect a broader trend toward easing tensions in the Middle East"

Wall Street fear gauge remains below 20

This article was published on Hankyung Global Market, South Korea’s largest platform for overseas investment information.

US stocks opened lower on April 20 as oil prices turned higher again after prospects for peace talks between the US and Iran grew more uncertain. Losses were limited, however, and the Dow Jones Industrial Average briefly attempted to move into positive territory, leaving the major indexes mixed.

As of 10:10 a.m. Eastern time, the S&P 500 was down 0.1%, snapping a five-session winning streak from last week. The Nasdaq Composite fell 0.4%. The Dow, which opened down 0.1%, hovered around unchanged.

West Texas Intermediate crude for June delivery rose 4% to above $87 a barrel. Global benchmark Brent crude gained 2% to $93 a barrel.

US stocks had rebounded from a pullback last month to return to record highs last week, indicating that investors were still factoring in the possibility of a favorable resolution. The Cboe Volatility Index, or VIX, stood at 18.77, not much higher than last Friday.

The two-year Treasury yield rose 2 basis points to 3.72%, while the 10-year Treasury yield was little changed at 4.25%. The ICE US Dollar Index was also little changed at 98.123.

Marvell Technology rose more than 4% after The Information reported that Google was in talks with the company about developing two AI chips. Broadcom, Google’s previous AI-chip development partner, fell 1.8%.

AST SpaceMobile dropped more than 10% after reports said New Glenn, the launch vehicle built by Jeff Bezos’s space company Blue Origin, failed to place the company’s satellite into its intended orbit.

Adam Crisafulli of Vital Knowledge said weekend news out of the Middle East was broadly negative, but the market still appeared to see an overall trend toward easing tensions.

Fawad Razaqzada of Forex.com said both sides were taking a hard line ahead of the deadline to strengthen their negotiating leverage.

Tom Essaye of The Sevens Report said markets still expect a lasting ceasefire agreement in the relatively near term. Unless ceasefire talks in Pakistan are called off, investors will largely continue to ignore negative geopolitical headlines, he added.

President Donald Trump said on April 19 that a cargo ship carrying Iranian nationality had been fired on and seized in the Gulf of Oman. That followed Iran’s decision not to participate in peace talks that the US is pursuing in Pakistan. Trump also threatened to blow up all of Iran’s power plants and bridges if Tehran does not agree to a deal with Washington. A ceasefire between the two countries is due to expire this week.

Even so, Trump said a deal was still possible. Vice President JD Vance, special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner are set to head to Islamabad for ceasefire talks on April 21.

US stocks rallied last Friday after a ceasefire between Iran and Lebanon, with the S&P 500 and Nasdaq Composite both closing at record highs.

Over the past week, the S&P 500 rose 4.5% and the Nasdaq Composite jumped about 7%. On Friday, the Nasdaq posted its first 13-session winning streak since 1992.

Kim Jung-a, contributing reporter