Stocks rose Monday and oil prices dropped even after Iran launched a missile attack on a U.S. military base in Qatar, in what experts are saying is a restrained response to prior U.S. strikes.
The Dow Jones Industrial Average closed 0.89% higher Monday, while the S&P 500 rose 0.96% and the Nasdaq Composite gained 0.94%.
The U.S. joined Israel’s war against Iran over the weekend, carrying out strikes against three Iranian nuclear sites. That’s adding even more uncertainty to markets, which have been dealt tough hand after tough hand this year, including the Trump administration’s erratic tariff policies, an ever-growing national debt, uncertain budget bill, and now conflict with Iran.
Iran responded by launching missiles at the U.S.’s Al-Udeid military base in Qatar on Monday, an attack which yielded no U.S. casualties, according to reports. Markets barely reacted and oil prices fell, indicating they could be waiting for a more forceful response before making any major movements, says Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute.
“Historical precedent of markets selling off initially, only to recover and make new highs, has led investors to be a bit more level-headed about their reaction,” says Samana about the little movement seen since the U.S. strikes. “Markets want to see how Iran responds prior to making a determination on how it might impact the macroeconomic story.”
Monday afternoon, President Donald Trump posted on his social network that the nuclear sites hit by the U.S. over the weekend “were totally destroyed.”
“Only the Fake News would say anything different in order to try and demean, as much as possible,” the president of the United States posted. “It never ends with the sleazebags in the Media, and that’s why their Ratings are at an ALL TIME LOW — ZERO CREDIBILITY!”
Iran could still cut off access to the Strait of Hormuz, a key shipping route for oil and gas that the country controls. Though Iranian lawmakers have approved its closure, it still remained open Monday afternoon.
“We would argue that while there is some risk of markets selling off on a variety of events, the fundamentals remain strong enough for market to continue their run higher into next year,” says Samana.