Dow Jones Industrial Average (DJIA) futures soared higher on Tuesday, pointing to a strong stock market open. Trump’s message of peace with Iran appears to have boosted investor sentiment and supported the markets.
But this conflict is far from over. Chairman of the Joint Chiefs of Staff, General Mark Milley warned that Iran’s retaliation isn’t over yet.
Milley and others in the military said they “fully expect” further attacks on US troops, lead by Iran-backed Shiite militia.
“That’s a very real possibility,” he told reporters.
Traders are still on edge over Middle East tensions and surprise attacks could threaten the stock market’s record highs.
Dow futures contracts enjoyed a strong overnight session, climbing more than 100 points before settling at 28,861.
Trump took steps to de-escalate tensions with Iran yesterday after the killing of Qassem Soleimani and the subsequent Iranian attacks on US military bases.
“Iran appears to be standing down, which is a good thing for all parties concerned” – President Trump.
The president instead opted for strict economic sanctions on the Iranian regime.
But the threat remains. Indeed, General Milley believes Iran had intended to kill US personnel in this week’s attacks, but failed.
General Milley stated:
I believe, based on what I saw and what I know, is that [the strikes] were intended to cause structural damage, destroy vehicles and equipment and aircraft and to kill personnel. That’s my own personal assessment.
Milley thinks further retaliations are still on the table. Iran supreme leader Ayatollah Ali Khamenei also hinted at further attacks. In a tweet, he said the Iran response was “not enough.”
While the risk of all-out war has faded, traders remain on edge. The Dow Jones recoiled from its session highs yesterday on reports of rocket fire and sirens at the US embassy in Baghdad.
Any hint of aggression in the region is likely to inject volatility in the stock market over the coming months. The good news is that both sides appear to favor de-escalation, but we can’t rule out future attacks.
“There’s likely still more to come from the Iranians, just not something in the very immediate future” – Heather Williams, Rand Corporation.
Last modified: June 14, 2020 9:53 AM UTC