Trump Lifts Djia 0.3% as Iran Talks Move Along Well
djia climbed 0.3% at Tuesday’s open as President Donald Trump said negotiations with Iran were "moving along well" and warned the U.S. was still prepared to act militarily if talks collapsed. The move gave traders a cleaner read on the session: lower crude prices and easing geopolitical tension were pushing stocks higher, with energy-sensitive names getting the biggest lift.
Trump’s Iran line
0.3%, 0.5% and 0.8% marked the opening gains in the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite, respectively. Trump’s comment that talks were "moving along well" helped extend a shift that had already been building as investors weighed the prospect of cooler tensions between Washington and Tehran.
7 basis points (hundredths of a percent) was the drop in the 10-year Treasury yield, which fell to 4.47% as stocks opened higher. A lower yield can ease pressure on equity valuations, and the move came alongside a market that was already pricing in only an 8.5% chance of a Federal Reserve rate hike in July.
Oil below $100
3.8% was the drop in West Texas Intermediate crude futures, which fell to $92 per barrel. Brent crude futures fell 3% to $96 per barrel, and U.S. oil was down 8.4% over the week, its steepest weekly decline since mid-April. That slide mattered most for sectors tied to fuel costs and inflation expectations, which had been pressured when crude was running hotter.
Before Tuesday’s open, the U.S. and Iran had exchanged fire in the Strait of Hormuz, with the U.S. saying it conducted self-defense strikes in southern Iran and the Islamic Revolutionary Guard Corps firing at a U.S. aircraft and drones. Those crosscurrents left the market focused on whether the latest diplomatic tone can hold long enough to keep oil pinned lower.
Micron leads chips
10% was Micron’s early gain, after the stock opened at a record intraday high and notched its 30th intraday all-time high of the year. UBS more than tripled its price target on Micron to $1,625, and the PHLX Semiconductor Index hit an intraday record after the opening bell. If crude stays weak and yields remain lower, the session’s early leadership points to chips and other growth stocks carrying more of the advance than energy shares.
