Summary
- Trump's announcement of an extension of the ceasefire with Iran helped lift S&P 500 futures by 0.4%%.
- U.S. plans to maintain the closure of the Strait of Hormuz pushed WTI crude above $90 a barrel, extending gains to about 10%% over the past two days.
- Remarks by Fed chair nominee Warsh could reduce expectations for monetary easing, while in the bond market the possibility of Fed balance-sheet reduction could add pressure for higher long-term yields.
Forecast Trend Report by Period
Relief spread across global markets after President Donald Trump signaled an extension of the ceasefire with Iran.
Bloomberg reported on April 21 that Trump said the ceasefire would remain in place until negotiations with Iran are completed. S&P 500 futures rose 0.4% in early trading, rebounding after the previous session's losses.
Markets had weakened earlier amid uncertainty over the Iran talks. The S&P 500 fell 0.6% in the prior session, while the dollar strengthened. Asian equity futures also moved lower, with Hang Seng futures down 1%, Nikkei 225 futures off 0.8%, and Australia's S&P/ASX 200 futures falling 0.7%.
Oil extended its advance. West Texas Intermediate crude traded above $90 a barrel and has gained about 10% over the past two days. Geopolitical risks remained in focus after the U.S. decided to maintain the closure of the Strait of Hormuz.
Uncertainty remains high, investors said. Chris Zaccarelli, chief investment officer at Northlight Asset Management, said the current environment is not one in which investors should stay entirely in cash or take on excessive risk.
Monetary policy comments also drew attention. Kevin Warsh, the Fed chair nominee, said a new policy framework is needed to address persistent inflation. He did not provide specific guidance on the path of interest rates. If appointed Fed chair, he said, he would make decisions independently.
Warsh's remarks may curb expectations for monetary easing. Steve Sosnick of Interactive Brokers said that for equities, diminished prospects for a dovish policy stance are a headwind. In bonds, he added, the possibility of Fed balance-sheet reduction could put upward pressure on long-term yields.
U.S. consumer data remained resilient. Recently released retail sales recorded the biggest increase in a year, suggesting spending is holding up despite higher oil prices.
Cryptocurrencies edged lower. Bitcoin fell 0.5% from a day earlier to about $75,500 on Binance's USDT market, while Ether slipped 0.4% to $2,307.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
