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Dow Futures on Knife Edge as Trump Fires White House Warmonger

Last Updated September 23, 2020 1:00 PM
Ben Brown
Last Updated September 23, 2020 1:00 PM

Dow Jones Industrial Average (DJIA) futures swung wildly on Wednesday as traders come to terms with the shock departure of Trump White House warmonger John Bolton. His resignation triggered a swift drop in the oil price and a small relief rally for global stock markets.

 Trump said he would name a replacement to John Bolton (right) next week. | Source: MARK WILSON / GETTY IMAGES NORTH AMERICA / AFP

Bolton’s aggressive military stance on the global arena blocked progress in all aspects of foreign policy. His removal immediately released the pressure valve on global tensions with Iran, Venezuela, and North Korea. Analysts believe his presence in the White House also slowed down trade negotiations with China.

“John Bolton was a huge headwind for a trade deal with China, markets reacted as such” – Oliver Sloup, Blue Line Futures brokerage .

Dow futures swing wildly on Wednesday

At 5.19 am ET, Dow Jones Industrial Average (DJIA) futures traded flat, up by a marginal 17 points, following an overnight session of choppy swings.

Dow Jones Industrial Average (DJIA) futures chart Trump John Bolton stock market effect
Dow (DJIA) futures chop wildly in early trading Wednesday as traders digest the departure of warmonger John Bolton from the White House. Source: Yahoo Finance

S&P 500 futures  were also flat while Nasdaq Composite futures  traded 0.17% lower.

John Bolton triggers oil price drop

The most immediate market reaction came from oil traders. The oil price dropped immediately  after his resignation.

Traders anticipate that Bolton’s departure will pave the way for dialogue with Iran and perhaps looser sanctions on the regime. The effect of which could increase oil supply from the region. More importantly, his resignation reduces the likelihood of conflict in the Middle East, a key pressure gauge for the oil price.

Dow relief as global tensions ease

Bolton’s departure eased tensions across the globe, like releasing a pressure valve on US foreign policy. In particular, Trump will have less resistance when it comes to dialogue with North Korea.

“Bolton’s departure would open the US up to taking a softer approach to talks with North Korea” Scott Seaman, Eurasia Group .


“Trump will have limited domestic opposition with regard to his soft stance on North Korea” – Waqas Adenwala, Economist Intelligence Unit .

Aside from the infamous “fire and fury” threat, Trump’s go-to foreign policy stance has always been diplomatic. He favors negotiation over military action. With one less warmongering voice in the White House, trade talks with China may even accelerate.

Other stock market factors on Wednesday

Dow futures are also enjoying a small boost from Apple’s successful iPhone reveal last night. Investors sent Apple stock 1% higher as Tim Cook unveiled the iPhone 11 with an enticing low entry price point. Cook simultaneously dealt a blow to Netflix and Roku with more details on Apple’s streaming service.

Elsewhere, the anticipation of monetary loosening at the European Central Bank  buoyed eurozone indices in Wednesday’s trading session.