Wall Street hesitates, oil prices rise amid uncertainty in Strait of Hormuz
Despite all the uncertainty about how long the war with Iran will last, the US stock market has managed to power to record after record
The US stock market is holding tentatively near its record heights on Monday, while oil prices climb with uncertainty about when oil tankers can resume crossing the Strait of Hormuz and restore the world’s flow of crude. Duelling claims about a possible Iranian strike on a US Navy vessel in the strait heightened the tensions.
The S&P 500 slipped 0.1 per cent, coming off its latest all-time high. The Dow Jones Industrial Average was down 216 points, or 0.4 per cent, as of 9.35am Eastern time, and the Nasdaq composite was up 0.1 per cent.
The action was stronger in the oil market, where the price for a barrel of Brent crude climbed 2 per cent to US$110.37 and briefly topped US$114 during the morning. Iran’s closure of the Strait of Hormuz due to its war with the United States has kept oil tankers pent up in the Persian Gulf and away from customers worldwide. That in turn has sent the price of Brent soaring from roughly US$70 per barrel before the war.
President Donald Trump said on Sunday that the United States would guide ships through the strait, which could get oil flowing again and bring down its price. But prices instead climbed after Iranian news agencies claimed on Monday that Iran had struck a US Navy vessel southeast of the Strait of Hormuz, accusing it of “violating maritime security and navigation norms”.
The US military quickly rejected the claims and later said two American-flagged merchant ships had “successfully transited through the Strait of Hormuz”.
Even with all the uncertainty about how long the war with Iran will last, the US stock market has managed to power to record after record. Hope is still high on Wall Street that the global economy can avoid a worst-case scenario because of the war. And in the meantime, companies continue to deliver big growth in profits.