US stock index futures rallied sharply overnight. This came after reports suggested that the Trump administration may seek a quick exit from military operations in Iran, withdrawing even if the Strait of Hormuz remains shut. This follows hot on the heels of President Trump’s threats to target Iran’s energy infrastructure and even desalination facilities should the Strait remain blocked.
At the same time, US forces are arriving in the Middle East, and speculation continues to swirl about ‘boots on the ground’ even if this means a relatively limited objective of seizing Iran’s Kharg Island, the main terminus for the country’s oil exports, rather than invading the whole country.
Early in the Asian Pacific session, the S&P traded at lows last seen over six months ago, with the implied cash market dropping within a few points of 6,300.
By early afternoon, it was back above 6,400, broadly mimicking yesterday’s early price action. On Monday, US stock index futures peaked at midday GMT and then proceeded to sell off to new cycle lows. We’ll see if history rhymes today.
Source: TN Trader
