Stocks were little changed Tuesday after President Donald Trump announced that the U.S. would pull out of the Iran deal championed by his predecessor, Barack Obama.
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The Dow Jones Industrial Average ticked 2.89 points higher, or 0.01%, to 24,360.21. The S&P 500 fell less than a point to 2,671.92. The Nasdaq Composite was up 1.69 points, or 0.02%, at 7,266.09.
According to Trump, the deal allowed Iran to continue developing nuclear weapons, and he called the country the “leading state sponsor of terror.”
During his speech, Trump added that "we will be reinstating the highest level of sanctions."
Stocks were lower immediately before Trump’s announcement, with the Dow down by about 60 points. They turned mixed in the aftermath of Trump's comments, with the Dow swinging between gains and losses.
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“Many on the Street are now likely wondering what [Trump] could walk away from next, and NAFTA could be on the short list,” said Mike Loewengart, vice president of investment strategy at E*TRADE. “For investors, the lesson of today is what it has been all year: It’s best to get comfortable, because volatility is here to stay.”
Ahead of the decision, Paul Christopher, head of global market strategy at Wells Fargo Investment Institute, told FOX Business that pulling out of the deal would “not immediately be a source of concern for our outlook.” Wells Fargo has a 2,800-2,900 target on the S&P 500 for year-end.
Christopher noted that there would be some immediate disappointment to Trump’s decision, but going forward to determine the total reaction, some nuances will have to be followed, including how Iran responds as well as whether the decision to pull out angers Russia, China and the Europeans.
Stocks rose Monday but finished well below their session highs after Trump tweeted that he would make an announcement Tuesday on the Iran nuclear deal.
U.S. crude oil broke through the $70 a barrel mark on Monday for the first time since 2014, but the commodity fell by as much as 4.4% on Tuesday. Oil trimmed its losses but was still lower after the announcement.
Iran is a major oil supplier and the sanctions could affect the flow of oil out of the country.
Walt Disney shares were slightly higher in after-hours trading after the media giant reported higher earnings and revenue than expected.