U.S. stocks ended slightly higher on Monday, after President Donald Trump said talks with Iran were ongoing and reiterated a Tuesday deadline for Tehran to reopen the critical Strait of Hormuz.
Trump spoke at a White House press conference, in which he added that Iran "could be taken out" on Tuesday night. Iran’s state media earlier said the country had rejected a potential ceasefire proposal to end its conflict with the U.S. and Iran.
The benchmark S&P 500 index added 0.4% to close at 6,611.29 points, the tech-heavy NASDAQ Composite rose 0.5% to settle at 21,996.34 points, and the blue-chip Dow Jones Industrial Average climbed 0.4% to conclude at 46,669.39 points.
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Wall Street coming off a roller-coaster week Market participants are returning from the long Good Friday weekend. Major European stock markets were closed for Easter Monday, while trading was thin in Asia.
It was a big week for Wall Street, with the three main averages posting their best weekly performance since November last year. The advance was mainly driven by a euphoric relief rally on Monday that was sparked by Middle East de-escalation hopes.
However, President Donald Trump towards the end of the week poured cold water on those hopes, after vowing to hit Iran hard over the next two to three weeks in an address to the nation.
"Overall, since the war against Iran has started, markets have acted mostly rationally. If you take a step back from the day-to-day, equities, fixed income and commodities are all behaving as expected in the environment," Oliver Pursche, senior vice president at Wealthspire Advisors, told Investing.com.
"Equities are about 5-1/2% off their all-time highs, which seems fair given that economic data in the U.S. remains solid, the labor market is holding steady, and consumer spending doesn’t appear to have suffered (yet). A resolution to the war within a week or two should be supportive of equities and fixed income, whereas a prolonged conflict will likely introduce new fears and related downside volatility," he said.
"As we enter the summer months, and taking into consideration that it is a mid-term election year, investors should prepare themselves for additional volatility and more muted returns. However, this does not mean that stocks will end the year in negative territory, but rather that it will likely be a bumpy ride," Pursche added.
Trump says Iran proposal ’not good enough’ On Monday, the focus was on a ceasefire proposal.
Both the U.S. and Iran have received a framework of a plan to halt hostilities, although Tehran has rebuffed any immediate reopening of the Strait of Hormuz, Reuters reported, citing a source aware of the proposals.
The plan -- brokered by Pakistan following overnight contacts with U.S. and Iranian officials -- would start an immediate ceasefire followed by talks on a broader settlement to be concluded within 15 to 20 days, Reuters reported.
