European shares fell on Wednesday and U.S. equity futures pointed to weakness on Wall Street after Iran’s attack on U.S.-led forces in Iraq, but earlier sharp market moves were starting to fade as fears abated that the raid would lead to an immediate military escalation, Reuters informed.
Hopes grew the United States would stop short of strong retaliation after U.S. President Donald Trump tweeted “All is well!”, and “So far, so good!”.
Iran’s Foreign Minister Mohammad Javad Zarif also tweeted that the Iranians “do not seek escalation or war”.
Futures for the S&P500, down almost 2% at one point, were trading just 0.10% lower by 0830 GMT, while Asian equities closed off their lows and Japan’s safe-haven yen stabilized.
Oil remained around 1% higher while gold held at new seven-year highs after the missile attack on the Ain Al-Asad air base and another in Erbil in Iraq, hours after the funeral of an Iranian commander who was killed by a U.S. drone strike last week .
A U.S. official said the United States was not aware of any casualties from the strikes. Trump is expected to make a statement later on Wednesday.
“The live situation was optically quite dramatic but the important thing to focus on is the no-human-casualty dimension which gives ample space to de-escalate the situation,” said Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers. “The Trump factor is the random factor but what’s visible is that no one wants war and that’s what markets are focusing on.”
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