The Dow Jones (DJIA) is set to open the trading week in the red as investors assess the potential for an extended war between the U.S. and Iran.
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Forget margin or options. Here's how the pros trade QQQOver the weekend, the U.S. and Israel launched a coordinated military strike against Iran, sparking concerns of growing conflict in the Middle East. Oil prices are also on the rise as Iran borders the Strait of Hormuz, which is responsible for roughly 20% of global oil shipments. Higher oil prices could push inflation higher, which has stubbornly remained above the Fed’s target of 2%.
Rate Cut Odds Sink on Oil Inflation Risk
Rate cut odds have fallen due to rising inflation risks, with the CME FedWatch tool pricing in a slim 2.5% chance of a 25 bps reduction at the March 18 Federal Open Market Committee (FOMC) meeting, down from 7.4% on Friday.
President Trump has said that the operation in Iran could last several weeks and will continue “until all of our objectives are achieved.” The two sides had previously engaged in discussions, with the U.S. encouraging Iran to dismantle its nuclear program and surrender its enriched uranium.