Israel continued to bombard Iran the day after the US joined the war.
Still, oil prices tumbled after Iran’s retaliation did not include action to disrupt oil and gas tanker traffic through the Strait of Hormuz. Tehran had warned it would close the Strait of Hormuz, a crucial oil shipping route.
Oil prices settled down more than 7 per cent on Monday (Jun 23), losing more than US$5 a barrel.
Brent crude futures LCOc1 closed down US$5.53, or 7.2 per cent, at US$71.48 a barrel, while US West Texas Intermediate crude (WTI) CLc1 eased US$5.53, or 7.2 per cent, to US$68.51.
Brent’s 7.2 per cent drop was the steepest since August 2022. The benchmark traded in a US$10 range, the widest since July 2022.
Both benchmarks were down nearly 9 per cent in after-hours trading.
“The markets are reading this as ‘hey, we’re successful,’ we took out their nuclear capabilities and we were able to support any counter-strikes,” Nolte said. “I think there was a lot of concern that Iran would do much more than it did.”
On the economics front, S&P Global’s advance “flash” purchasing managers’ indexes (PMI) showed the US economy is expanding at a slightly more robust pace than analysts anticipated. A separate report showed new home sales, while under pressure from elevated borrowing costs, posted an unexpected gain in May.
Later in the week, the Commerce Department’s final take on first-quarter GDP and its Personal Consumption Expenditures (PCE) and Fed Chair Jerome Powell’s congressional testimony are likely to be parsed for clues regarding the near-term path of monetary policy.
The Dow Jones Industrial Average rose 374.96 points, or 0.89 per cent, to 42,581.78, the S&P 500 gained 57.33 points, or 0.96 per cent, to 6,025.17 and the Nasdaq Composite gained 183.57 points, or 0.94 per cent, to 19,630.98.
Among the 11 major sectors of the S&P 500, consumer discretionary stocks led the gainers, while energy, weighed by falling crude prices, was the only sector to close in negative territory.
Fiserv’s shares rose 4.4 per cent following its announcement that it would launch a new digital asset platform.
