Dynamic rally and new historically high recorded key indicators in Wall Street On Friday, as Iran announced that Straits of Hormuz is «fully open» for commercial navigation, in conjunction with the truce between Israel and Lebanon, it drastically strengthened the investment climate with indicators closing in green for a third consecutive meeting.
In this climate on the dashboard, Dow Jones made a 1.79% jump at 49,447 units, S&P 500 first surpassed 7,100 units and closed with a 1.20% rise to 7,126 points while Nasdaq was boosted by 1,52% to 24,468 units.
At the same time, the Russell 2000 small capitalization index was boosted by 2%, also touching a new record.
The expectations for an agreement pushed the key indicators to strong weekly profits, with Dow being boosted by 3%, S&P 500 by 4% and Nasdaq by 6%.
The market reaction was expected after Iran's Foreign Minister Seyed Abbas Aragci posted that, under the truce, the passage of all merchant ships from the Straits of Hormuz is fully open, provided that a coordinated route established by the Iranian authorities is followed.
United States President Donald Trump had already announced on Thursday an agreement on a 10-day truce between Israel and Lebanon, which entered into force that same afternoon.
This development led to a sharp drop in oil prices, as concerns over supply disruption resolved.
Trump thanked Iran for opening the Straits, however stressing that the naval blockade of Iranian ports will remain in full force until an agreement is reached, adding that the process is expected to evolve quickly, as most issues have already been agreed.
Skepticism for the fragile situation
However, despite the positive messages, uncertainties remain, as Iranian means transmitted that ships linked to «Hostile countries» they may not be allowed to pass, while the possibility of imposing transit charges has not yet been cleared.
«The situation is extremely fragile and changing», said IMF International Monetary and Financial Committee Chairman Mohammed Aljadhaan at a press conference at the IMF headquarters in Washington. As he said, every de-escalation is «positive evolution»However, he stressed that the return of insurance cover for ships by insurance companies would be a major challenge.
Earned and lost shares
However, the shares of the sectors under pressure from the crisis, such as airlines and cruise companies, recorded a strong recovery. Companies such as Boeing and Royal Caribbean were boosted by 3% and 8% respectively, while upwards they moved and colossals such as Amazon and Airbnb.
According to Ameriprise's chief purchasing strategy, Anthony Saliben, investors «are now beyond the conflict scenario», with the market assessing the gradual de-escalation and keeping open the Straits of Hormuz.
At the same time, large-capitalized technological shares — so-called «Magnetic Seven» – they recorded a new rise, with the relevant ETF being boosted over 1% on Friday for a third consecutive week of profits over 8%. Tesla stood out with a 15% rise on a weekly basis, while Microsoft gained almost 14%, the largest weekly rise since 2007.
In total, 36 shares of S&P 500 recorded new high 52 weeks, including companies such as eBay, Hilton, AMD and Dell Technologies.
At branch level, energy shares were under strong pressure, with companies such as APA, Valero, Occidental and Exxon Mobil recording significant losses, following the fall in oil prices. On the contrary, the travel industry moved upwards, with Royal Caribbean taking a leap of almost 10% and United Airlines strengthening over 9%.
At the same time, Critical Metals recorded a rise of over 40%, after the Greenland government approved to obtain a majority in a rare earth mining project.
On the monetary policy front, the president of the San Francisco Fed Mary Daley appeared more cautious, noting that, although before the war supported a reduction in interest rates, he now qualified for a waiting stop until the conflict course was clear.
«Policy is at a good point and it is appropriate to wait for the data and see how the situation develops.», he said, pointing out that the balance between growth and inflation remains fragile.
Source: www.newmoney.gr
