Middle East War Jitters Weigh On Markets: US Treasuries Hit 5-Month Highs On Worsening Risk Sentiment, Disappointing Data
Portfolio Pulse from Piero Cingari
Geopolitical tensions in the Middle East and disappointing economic data have led to increased demand for U.S. Treasury bonds, causing the iShares 20+ Year Treasury Bond ETF (TLT) to rise. The S&P 500 (SPY) and iShares Russell 2000 ETF (IWM) fell, while the United States Oil Fund (USO) also declined. Markets are now expecting three Federal Reserve rate cuts by year-end.
August 01, 2024 | 3:53 pm
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POSITIVE IMPACT
The iShares 20+ Year Treasury Bond ETF (TLT) saw a 1% increase due to heightened demand for safe-haven assets amid escalating geopolitical tensions in the Middle East.
Increased geopolitical tensions have led to a flight-to-safety, boosting demand for long-term U.S. Treasury bonds, which is reflected in the rise of TLT.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
The iShares Russell 2000 ETF (IWM) dropped by 2.8%, marking its worst session since April, due to heightened geopolitical risks and weak economic indicators.
Small-cap stocks are more sensitive to economic and geopolitical risks, leading to a significant drop in IWM.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 100
NEGATIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) fell by 0.8% as market sentiment turned negative due to geopolitical concerns and disappointing economic data.
Negative market sentiment driven by geopolitical tensions and weak economic data has led to a decline in the S&P 500, impacting SPY.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 100
NEGATIVE IMPACT
The United States Oil Fund (USO) fell by 1.2% following a 4.4% rally, as geopolitical tensions and market volatility impacted oil prices.
Oil prices are highly sensitive to geopolitical events, and the current tensions have led to increased volatility, causing a decline in USO.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 100