Traders work on the floor of the New York Stock Exchange (NYSE) in New York City.
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Stock futures were lower on Tuesday as investors pored through the latest developments in the Middle East, with the conflict between Israel and Iran raging on.
Futures tied to the Dow Jones Industrial Average declined 235 points, or 0.5%. S&P 500 futures dropped 0.5%, while Nasdaq 100 futures dipped 0.6%.
On Monday evening, President Donald Trump said in a Truth Social post that “Everyone should immediately evacuate Tehran.” Trump also left the G7 summit in Canada early to deal with the situation in the Middle East.
French President Emmanuel Macron said Monday that Trump offered a ceasefire between Iran and Israel. However, Trump said his departure from the G7 had “nothing to do with a Cease Fire. Much bigger than that.”
“We’re all in a bit of a limbo in terms of whether anything substantive came out of the summit and whether Trump was alluding to new information with his post and his early G7 meeting departure,” Deutsche Bank strategist Jim Reid wrote.
Oil prices popped Tuesday as the conflict escalated. West Texas Intermediate crude futures advanced 1.5%, while Brent futures gained 1.7%.
Wall Street is coming off a positive session on Monday despite the brewing conflict in the Middle East. The S&P 500 gained roughly 0.9%, while the Dow advanced more than 300 points. The Nasdaq Composite jumped 1.5%.
“[Israel’s] main short-term objective is to neutralize the Iranian nuclear threat. Longer term, the more difficult goal is to effect regime change, though it is not clear whether that will be achievable,” said Jeff Buchbinder, chief equity strategist at LPL Financial.
He added that while every conflict is different, an analysis of 25 geopolitical shocks dating back to the Pearl Harbor attack in 1941 showed that stocks have been resilient in these scenarios. Total drawdowns around these events have averaged 4.6% over an average of roughly 19 days, Buchbinder said.
