Moderate gains on Wall Street. However, hopes for de-escalation of the conflict are growing
Wednesday's session on Wall Street brought moderate gains in the main indexes as investors hope for an easing of the conflict in the Middle East after President Donald Trump presented a proposed agreement to Iran. Oil prices fell.
The Dow Jones Industrial was up 0.66% at the close. and amounted to 46,429.49 points.
The S&P 500 increased by 0.54% at the end of the day. and amounted to 6,591.90 points.
The Nasdaq Composite increased by 0.77%. up to 21,929.83 points
The Russell 2000 mid-cap index is up 1.12%. and amounts to 2,534.22 points.
The VIX index loses 5.97%. up to 25.34 points
Hopes for the de-escalation of the conflict in the Middle East grew among investors during the day. The United States delivered a 15-point plan to end the war to Iran through Pakistan, the New York Times reported, citing two officials familiar with the matter.
According to officials cited by the daily, the plan concerns Iran's ballistic missile program and its nuclear program – the two main goals of the bombing campaign conducted by Israel and the US since February 28.
If Iran does not reach an agreement and understand that it has been defeated, President Donald Trump is ready to “unleash hell,” said White House spokeswoman Karoline Leavitt. She confirmed that reports about the US's 15-point proposal are only partially true.
“If Iran does not accept the reality of the current situation, if it does not understand that it has been defeated militarily, President Trump will ensure that it is hit harder than ever before,” Leavitt said during a White House briefing.
Iranian state media reported that the country rejected the U.S. ceasefire offer, instead presenting a five-point plan that includes giving Iran control of the Strait of Hormuz.
Tehran has so far publicly denied that it will negotiate with the Trump administration. Iran's Fars news agency reported that Iran rejects the negotiations, calling them pointless in the current situation. In turn, Iranian military spokesman Lieutenant Colonel Ebrahim Zolfaghari said that the US was negotiating with itself.
Israel continues to shell Tehran, and Iran continues to bombard the Persian Gulf states. Kuwait and Bahrain were attacked on Tuesday evening and Wednesday morning.
BlackRock CEO Larry Fink said oil prices could hit $150 a barrel and cause a global recession if Iran remains a threat even after the war ends.
A surge in oil prices linked to the Iran war has revived inflation fears, complicating the outlook for central bank interest rates.
According to CME Group's FedWatch Tool, markets are not factoring into prices any easing of Federal Reserve policy this year, compared with two cuts expected before the war broke out.
“Investors should be cautious in assuming a quick restoration of power supplies, but our underlying assumption is that they will be restored without significant or lasting economic damage.” – analysts from UBS Global Wealth Management said in the report.
In the USA, there was a decline in the MBA mortgage application index – the seasonally adjusted index fell by 10.5%. during the week ending March 20. Previously, the index increased by 3.2%.
US crude oil inventories last week increased by 6.93 million barrels, or 1.54%, to 456.16 million barrels. Gasoline stocks fell by 2.59 million barrels, or 2.59 percent, to 241.45 million barrels during this time.
Reserves of distillate fuels, including heating oil, increased by 3.03 million barrels, or 2.59%, to 119.94 million barrels.
On the oil market, WTI contracts for April are down by 1.36%. to USD 91.09 per barrel, and May Brent futures lose 1.59%. up to USD 102.80/b. (PAP)
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