Stock Market
By Julie Binoche
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The dollar took a hit Tuesday. Former President Donald Trump said the Iran conflict might wrap up soon, sending currency traders scrambling to adjust their positions during what…
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Trump's Florida speech caught markets off guard, basically flipping the script on geopolitical risk calculations that have been driving safe-haven flows for months.
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Behind the scenes, diplomatic chatter has been heating up for weeks now, though nobody's talking specifics about what kind of deal might be in the works.
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Secretary of State Antony Blinken dodged questions at his press briefing. "We're hopeful but cautious," he said, which doesn't really tell us anything concrete about where things…
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Oil markets didn't wait around to find out. Brent crude dropped 2.3% to $82.47 per barrel as traders figured less Middle East drama means steadier supply flows.
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The pound also got in on the action, rising 0.5% to $1.325. Sterling has been pretty beaten up lately, so any excuse to climb against the dollar was welcome news for UK assets.
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Jane Foley from Rabobank thinks everyone needs to pump the brakes. "The geopolitical landscape is complex," she said. "Premature assumptions could lead to volatility.
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The dollar index hit 97.85, its lowest point in two weeks. That's a significant drop for a currency that's been pretty resilient lately, and it shows just how much geopolitical…
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Iran's response was typically measured. Foreign ministry spokesperson Nasser Kanaani said Tehran wants "tangible actions from the U.S." during his press conference.
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Wall Street reflected the currency chaos. The S&P 500 dropped 0.3% as energy names got hammered by falling oil prices. Boeing shares bucked the trend though, gaining 1.
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Treasury yields fell as the dollar weakened. The 10-year note dropped to 1.85%, which is kind of weird since you'd normally expect yields to rise when safe-haven demand falls.
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Gold took a hit too, falling 1.1% to $1,540 per ounce. The precious metal has been benefiting from Middle East tensions, so Trump's comments knocked some of that premium out of…
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The Fed's watching all this closely. Any major shift in geopolitical risk could change their monetary policy calculus, especially if oil prices keep falling and take inflation…
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Market participants are basically in wait-and-see mode right now. Without official confirmation from Washington or Tehran, nobody wants to make big bets on what comes next.
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Trump's comments definitely shook things up, but whether this leads to real diplomatic progress remains unclear.
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