Iran worries leave markets in risk-off mode

Chris Beauchamp IG

Hopes of a market rally have been dashed while potential military action dominates the headlines, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

Markets on edge as Iran news awaited

In a quieter period for markets today news, or lack of it, around Iran is the driver for the day. Each time President Trump sounds more conciliatory the market rallies, while hints of action cause it to weaken. Hawkish Fed minutes last night have cast their own shadow over the day, as they remind investors that simply placing Kevin Warsh in charge of the Fed is unlikely to lead to Trump getting his own way very quickly, and sets us up for more Fed drama even after Powell steps down.

Climbing volatility signals continued worries

Earlier in the week it looked like we had another typical volatility slam, given the sharp drop in the Vix. But the index has turned around as geopolitics dominates the headlines frustrating any attempts at mounting a sustained bounce in beaten-down sectors like software. This could go on for some time, since it is far from certain that the US will make a move, despite the extensive (and expensive) buildup around Iran.

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Chris Beauchamp

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