Markets are moving on reports that the US President wants war over
U.S. equity futures climbed on Tuesday, helped by signs that tensions between Washington and Tehran may be easing — a development many portfolio managers hope could remove a key overhang from markets. The original report on the shift in tone from the White House was first carried by CNBC, citing coverage in The Wall Street Journal.
Futures point to broad rebound
Pre-market trading indicated a stronger open for U.S. stocks. Dow Jones Industrial Average futures were up 553 points, or about 1.2%. Contracts linked to both the S&P 500 and the Nasdaq 100 showed similar gains of roughly 1.2%, suggesting a broad-based risk-on move across large-cap U.S. equities.
According to reporting highlighted by CNBC, The Wall Street Journal said President Donald Trump has told aides he’s prepared to wind down U.S. military engagement in the Middle East, even if the strategically critical Strait of Hormuz remains largely blocked to shipping. That hint of de-escalation helped shift sentiment after several volatile sessions tied to the conflict.
Tech bounces as conflict pressure eases
The technology sector, a key driver of U.S. returns and a meaningful exposure in many Canadian balanced and equity mandates, looked set to recover some ground after being under pressure since hostilities began. The Technology Select Sector SPDR Fund (XLK) rose about 0.6% in pre-market trading. Semiconductor giant Nvidia gained roughly 1%, while Microsoft advanced nearly 2%.
For Canadian advisors overseeing clients with U.S. growth allocations or tech-heavy ETF holdings, this rebound may offer some relief after recent drawdowns, but it also underscores how sensitive these names remain to geopolitical headlines.
Oil still elevated after tanker incident
Despite the improving tone around the broader conflict, crude prices stayed elevated following fresh headlines out of the Gulf. Bloomberg reported that Iran struck a Kuwaiti oil tanker in Dubai waters. In a post on X, Dubai’s government media office said there were no injuries and that “the safety of all 24 crew members has been secured.”
Oil benchmarks pushed higher on the news. Brent crude futures climbed about 4%, trading above US$117 per barrel. West Texas Intermediate (WTI) crude futures were up nearly 1%, moving past US$103 per barrel. For Canadian investors, persistently high crude prices are a double-edged sword: they support domestic energy producers and related dividend flows, but they also reinforce inflation concerns and the potential for tighter financial conditions.
Recent pullback framed as a normal correction
Tuesday’s move comes after a mixed session on Wall Street. The S&P 500 and Nasdaq Composite closed lower on Monday, while the Dow managed a modest gain.
The S&P 500’s decline left the benchmark just over 9% below its recent closing high, driven in large part by weakness in the technology sector, which fell more than 1% on the day. Speaking to CNBC, Art Hogan, chief market strategist at B. Riley Wealth Management, argued that recent volatility still fits within the bounds of a typical correction rather than signalling a structural break.
“There’s a couple of narratives going on, but I think long term investors should keep in mind that 10% corrections are normal. They happen all the time. On average, every two years we have a 10% correction,” he said to CNBC. “It’s also important for investors to understand that the volatility in equities is the price you pay for the higher longer-term returns.”
Hogan added that markets have responded quickly to any hint of improving headlines. “We’ve had a smattering of positive days when there’s some whiffs of good news,” he said.
Tuesday also closes the book on the month. The S&P 500 is down 7.8% so far in March. If that loss holds through the close, it would mark the index’s weakest monthly showing since September 2022, when it dropped 9.3%.
