Geopolitical risk overshadows weak macro data and FOMC anticipation
🧠Market Snapshot – Futures (Afternoon, ET)
- Dow Futures: -100 pts
- S&P 500 Futures: -15 pts
- Nasdaq Futures: -75 pts
Tuesday saw a sharp reversal, erasing all of Monday’s gains as geopolitical fears surged into the forefront.
🛢️ Trump’s Iran Rhetoric Sparks Sell-Off
Markets soured after:
- President Trump demanded “unconditional surrender” from Iran
- He targeted Iran’s Supreme Leader in a social media post
- Reports surfaced that Trump is weighing an airstrike on Iranian military targets
These developments triggered a risk-off move, with traders rotating into safe havens like gold and bonds as Middle East conflict risks rose sharply.
📉 Weak Data Ignored Amid Macro Stress
Despite underwhelming U.S. economic prints:
- Retail Sales and Industrial Production came in soft
- Markets largely ignored the data, focused instead on global tensions
Investors are growing wary of the stagflationary mix of slowing growth and rising commodity-driven inflation risks.
🏛️ All Eyes on Powell, FOMC Decision Ahead
Tonight’s FOMC policy announcement is critical:
- No rate change is expected
- But Fed Chair Jerome Powell’s forward guidance on:
- Oil-driven inflation risks
- Rate cut timing for 2025
- Geopolitical uncertainty
…will be decisive in shaping the next leg of market direction.
Traders want clarity: Is the Fed still aiming for rate cuts this year, or will inflation override?
⚠️ Key Takeaway
With geopolitical risks accelerating and Fed communication on deck, volatility is likely to remain elevated in the near term. Any hawkish shift or military escalation could trigger further downside risk for equities.
