U.S. equity futures fell after President Trump ordered an airstrike on Iraq that killed an Iranian general. All three of the major U.S. averages fell with the Dow Jones Industrial Average off 0.78% (225 points).
News that Gen. Qassem Soleimani, head of Iran’s elite Quds Force, was killed in an air attack at the Baghdad international airport prompted expectations of Iranian retaliation against U.S. and Israeli targets. The developments come after the first trading session of the new year sent Wall Street to new records on Thursday. Investors were encouraged by expectations of stronger global economic growth in 2020 and the planned signing of an interim U.S.-Chinese trade agreement.
CNBC:
“It’s a game-changer,” Dryden Pence, chief investment officer at Pence Wealth Management, told CNBC’s “Squawk Box” on Friday. “We now have vast, broader array of weapons systems that the president has at his disposal. We’ve been able to weaponize economic sanctions now where we can go after individuals, … but now I think the ultimate sanction that the president is able to use is an airstrike.” Pence added, however, that any market volatility “will be short-lived.”
President Donald Trump on Friday morning tweeted his first statement after an American airstrike killed Iran’s top military commander hours earlier.
“Iran never won a war, but never lost a negotiation!” the president tweeted.
Iran never won a war, but never lost a negotiation!
— Donald J. Trump (@realDonaldTrump) January 3, 2020
— Donald J. Trump (@realDonaldTrump) January 3, 2020
Soleimani led the special Quds Force unit of Iran’s elite Revolutionary Guards and has been blamed for the deaths of hundreds of Americans and many other across the Middle East. The Pentagon said he had been actively planning attack on U.S. diplomats and service members in Iraq and elsewhere throughout the region.
Secretary of State Mike Pompeo blamed Iranian-supported forces for several attacks on bases in Iraq. Pompeo also warned that any future attacks on Americans or U.S. allies would be “answered with a decisive U.S. response.”
MacDailyNews Take: Some short-term volatility is, of course, to be expected. As per the amount of volatility: Yesterday, the Dow opened at 28,638.97, today it’s currently at 28,610.00.