Benchmark indices on Wall Street recovered significantly from the day’s low, although all three ended with losses nonetheless on Tuesday.
The Dow Jones, which at the lowest point of the session was down over 1,200 points, recovered nearly 800 points from the lows to end with losses of over 400 points. The S&P 500 and Nasdaq were both down 1% each, recovering from their respective session’s lows, during which they declined over 2.5% each.
US President Donald Trump declared that he has asked the United Stated Development Finance Corporation (DFC) to provide, at a very reasonable price, risk insurance and guarantees for the financial security of all maritime trade, especially energy, travelling through the Gulf.
He also said that if necessary, the US Navy, will begin escorting tankers through the Strait of Hormuz to ensure free flow of energy to the world. Trump’s remarks come as the IRGC has warned of setting fire to any ship that tries passing through the Strait, which is a major supply choke point for over 20% of the global oil supply.
Despite the recovery on Wall Street, all sectors on the S&P 500 ended with losses.
Gold and Silver prices also saw a sharp sell-off on Tuesday. A rising US Dollar, hardening bond yields, and lesser hopes of the US Federal Reserve cutting rates this year weighed on prices. All three factors are negative for bullion. Traders are now pricing in only one 25 bps rate cut this year. Additionally, traders were forced to sell bullion to cover up for the margin calls that were triggered in other parts of their portfolio.
Gold prices are now below $5,100, while Silver trades around $82 an ounce. The US Dollar index is back above 99, while Brent trades above the $82 per barrel mark.