Recent US strikes on Iran have created significant reverberations in the financial markets. This article examines the consequences of these events.
US Strikes on Iran
On Saturday, the United States launched direct strikes on three Iranian sites, following a week of Israeli bombardments targeting Iran's air defense systems, missile facilities, and uranium enrichment centers.
Market Reaction
President Donald Trump, in a statement following the strikes, floated the possibility of pursuing 'regime change' in Tehran. This may suggest that his administration is less interested in negotiations. On Monday, the geopolitical developments had an impact on financial markets, with the US Dollar Index rising to 99.287, up 0.37% from Friday's close. The S&P 500 index dropped 0.22% before trading commenced, continuing its four-week decline.
Economic Data and Forecasts
Data on home sales in the US showed a decline of 9.7% in May, missing analyst expectations. Additional data on the Personal Consumption Expenditures (PCE) index is forthcoming, which may provide insights into future inflationary pressures. The first-quarter GDP estimate for 2025 is scheduled for release on Thursday, with expectations of a 0.2% contraction on an annualized basis.
The repercussions of the recent US strikes on Iran continue to influence financial markets, raising questions about future economic developments and inflation.
