Dow Rose 189 Points Last Week in Spite of Problems With Iran

The markets hit new all-time highs after tensions with Iran de-escalated.

Last week, tension between the U.S. and Iran reached an all-time high. On Tuesday, Iran attacked two military bases in Iraq that were housing U.S. troops. This caused the Dow to tumble 400 points overnight and the S&P 500 dropped 1.6%.

But the crisis quickly de-escalated once it became clear that there were no injuries or deaths stemming from the attack. Markets quickly rebounded and hit near all-time highs after comments from President Trump indicated that the conflict was resolved. 

Markets hit new all-time highs

After the crisis subsided, the S&P 500 rose 0.66%, the Nasdaq Composite rose 0.80%, and the Dow rose 189 points. Each of these indexes were nearing all-time highs; this is somewhat surprising given some of the recent international tensions. 

According to Frank Lavin, the former U.S. ambassador to Singapore, this is largely due to how President Trump handled the tensions with Iran. Lavin called it “a modest win” for the President, though he acknowledged that the problem with Iran isn’t going away anytime soon.

Instead of responding with further military action, the Trump administration chose to impose additional sanctions on Iran. Lavin seemed to agree with this move, stating, “I think they’re going to be proven to be the right set of actions.” 

What to look for in the market this week

The banks will kick off the fourth-quarter earnings season this week. JP Morgan, Citigroup, Goldman Sachs, and Bank of America are set to release their earnings beginning on Tuesday. 
And this week, investors will be paying close attention to how the trade deal between the U.S. and China plays out. China’s chief trade negotiator and a delegation are scheduled to arrive in Washington this week to sign the first phase of the trade deal. There is still a lot of uncertainty around the trade deal, but investors seem to be optimistic about it.