Since the war in Iran began, the Dow Jones (DJI) has fallen in after-hours trade. That set up morning stock market weakness, then a gradual rebound by the end of the day.
This morning, expect oil price strength to hurt the Dow again. Late last night, Dow Futures fell by over 400 points. Despite Energy Secretary Chris Write announcing that the U.S. would release over 170 million barrels of oil from its Strategic Petroleum Reserve, the Dow traded lower.
The oil’s release still takes 120 days to deliver. The market prefers shipments through the Strait to return to normal levels. Unfortunately, the risks that Iran would ship led to a standstill. To restart insurance coverage for ships, Chubb (CB) said that it would lead the underwriting that the U.S. government is supporting. The U.S. International Development Finance Corp. (“DFC”) has $20 billion available to insure ships.
In mid-week trade, investors sold off Visa (V) and Mastercard (MA). Bank stocks also fell, while asset management firms like KKR (KKR) and Ares Management (ARES) fell by 3.15% and 4.8%, respectively. Investors bought back AI chip suppliers. Micron (MU) gained 3.9%, while Intel (INTC) added 3.7%.
Defensive firms like Philip Morris (PM) and Altria (MO) dropped. Paying a solid dividend, cautious investors might consider holding those two tobacco firms.
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