3 weeks ago
US stocks open mixed as US-Iran standoff keeps markets cautious
On Tuesday, August 11, people who invest money in companies had a busy day watching two big stories.
One story was about a disagreement between the United States and Iran.
The other was about prices and money.
Because of these stories, the stock market had a mixed day — some parts went up a little, and other parts went down a little.
The Dow Jones Industrial Average, which tracks big companies, went up a small amount, while the Nasdaq, full of technology companies, went down.
Nvidia, a company that makes computer chips for artificial intelligence, went up more than one percent because it will help gather more than 500 billion dollars for AI projects.
Oil, the fuel used for cars and planes, stayed at about 87 dollars a barrel.
Iran is close to an agreement with Oman to reopen the Strait of Hormuz, a narrow waterway used by oil ships, but it will not talk directly with the United States until its conditions are met.
Investors are also waiting for a new report about prices to figure out what the Federal Reserve will do about interest rates.
US stocks opened mixed on Tuesday, August 11, with the Dow Jones Industrial Average up 0.4% (202 points), the S&P 500 little changed, and the Nasdaq Composite down 0.4%.
Nvidia shares rose more than 1% after the chipmaker said it is partnering with six large asset managers to mobilize more than $500 billion for artificial intelligence infrastructure.
Brent crude hovered around $87 a barrel after Pakistan's defence minister Khawaja Asif said the US and Iran were 'close to some sort of arrangement.'
Iran says it is nearing an agreement with Oman to reopen the Strait of Hormuz but continues to resist direct negotiations with Washington until its conditions are met.
Investors are also looking ahead to US inflation data that could influence the Federal Reserve's interest-rate path, as higher oil prices renew inflation concerns.
- Who
- US President Donald Trump, Iranian Foreign Minister Abbas Araghchi, Pakistan's defence minister Khawaja Asif, and investors tracking stock and oil markets.
- What
- US stocks opened mixed as the US-Iran standoff over the Strait of Hormuz kept markets cautious, with Nvidia's AI infrastructure announcement and steady oil prices in focus.
- Where
- US stock markets, with oil markets tied to the Strait of Hormuz and negotiations involving Iran and Oman.
- When
- Tuesday, August 11.
- Why
- Uncertainty over a deal to reopen the Strait of Hormuz, hardened US-Iran tensions, and upcoming inflation data influenced market sentiment and the Federal Reserve's interest-rate path.
Iran's Position
US Position
Negotiations and the Strait of Hormuz
Iran's Position
Iran says it is nearing an agreement with Oman to reopen the Strait of Hormuz but will not hold direct negotiations with Washington until its conditions are met; Foreign Minister Abbas Araghchi says there is 'no possibility of restarting negotiations' under current conditions.
US Position
President Donald Trump rejected Iran's demand for war reparations and said economic pressure on the country would build, while investors remain cautious over uncertainty about a deal to reopen the strait.
Inflation and Federal Reserve policy
Iran's Position
Some analysts, such as Montis Financial CIO Dennis Follmer, expect the CPI report to continue its downward trend, supporting the case for the Federal Reserve to hold rates steady rather than hiking them.
US Position
Higher oil prices have renewed concerns over inflation, and a sharp slowdown in hiring raises questions about consumer spending and the broader economy, complicating the Fed's rate path.
Key facts
- Date
- Tuesday, August 11
- Dow Jones Industrial Average
- Up 0.4%, or 202 points
- S&P 500
- Little changed
- Nasdaq Composite
- Down 0.4%
- Nvidia shares
- Rose more than 1%
- AI infrastructure funding
- More than $500 billion, via Nvidia partnership with six asset managers
- Brent crude
- Around $87 per barrel
- US-Iran talks
- Iran nearing Oman agreement to reopen Strait of Hormuz; no restart of direct negotiations under current conditions
Quotes
Dennis Follmer
Chief Investment Officer at Montis Financial
“I expect the CPI report to continue its downward trend which will further support the case for the Federal Reserve to hold rates steady rather than hiking them, even with last Friday’s weak jobs report.”
CNBC TV 18
“Services inflation could continue to be a sticky problem, but that sector is not very sensitive to interest rates, so it shouldn’t really damage the case for holding steady.”
CNBC TV 18
Abbas Araghchi
Iranian Foreign Minister
“No possibility of restarting negotiations.”
CNBC TV 18
Sources
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