US stock market: The US stock market‘s key benchmark indices are poised to open on a strong note on Monday, March 16, while the US dollar came under pressure ahead of the central bank meeting this week and as investors focused on whether the Strait of Hormuz, a key oil route, could reopen.
The Dow Jones futures were trading higher by 0.22%, while S&P 500 futures were higher by 0.39%, looking set to snap their four-day losing run. Last week, both indices had cracked 2%. At the same time, tech-heavy Nasdaq futures were up 0.44%. The index had slumped over 1% in the week ended Friday.
President Donald Trump has raised pressure on nations to help reopen the key oil route, which accounts for a fifth of the world’s crude oil trade, and said the US was in talks with Iran.
The situation in the Strait of Hormuz remained a major investor focus as the blockade has sparked a sharp surge in crude oil prices, raising macroeconomic concerns. According to a Reuters report, US President Donald Trump has demanded a coalition to help reopen the vital waterway. However, allies Japan and Australia said they were not planning to send vessels to escort ships through it.
Further complicating matters, Trump told the Financial Times (FT) on Sunday that he was expecting China to help unblock the strait before his scheduled meeting with President Xi Jinping in Beijing at the end of this month. He said he might postpone his trip if China did not assist. He also warned that NATO faces a “very bad” future if its members failed to come to Washington’s aid, the report added.
Brent crude oil futures, which have spiked 40% since the start of the US-Iran war, traded higher, rose to a peak of $106.50 per barrel today after US strikes on military targets on Kharg Island on Sunday, the terminal that handles almost all of Iran’s oil exports. He further told FT that the US was prepared to launch new strikes on the island.
However, WTI crude traded lower at $98.36 after rising to $100 in overnight trade.
All eyes on the central bank
Crude’s jump since the war began has also complicated matters for the global central banks, which are slated to meet this week, including the US Federal Reserve. Investors will keenly track the commentary to gauge the impact of the crude oil price spike on inflation and growth.
The Fed is widely expected to keep the interest rates on hold for the second consecutive time this year during its meeting on March 17-18.
The European Central Bank, the Bank of England and the Bank of Japan are among others slated to hold their first policy meetings since the Middle East conflict began.
Ahead of the Fed meeting this week, the US dollar pulled back. The dollar index was a tad lower at 100.27 after hitting a 10-month high on Friday. The dollar has benefited from a flight to safety since the US-Israeli strikes on Iran began at the end of February.
(With inputs from agencies)
