Wild Ride: Stock Futures Plunge on Iran War Panic Then Recover as Reality Takes Hold

U.S. stock futures recovered on Tuesday night after both President Donald Trump and an Iranian official signaled that Iran’s rocket attacks on Iraqi military bases was not a prelude to a full-scale war.

Stock futures initially plunged as news of the Iranian attacks broke. Dow Jones Industrial Average futures dived more than 400 points immediately after the attack. S&P 500 and Nasdaq Composite futures also dropped sharply.

But after President Trump tweeted that “all is well” and an Iranian official indicated that the Iranian attacks on Tuesday night had concluded its response to the recent killing of Qassem Suleimani, futures moved sharply higher.

Oil prices followed the opposite trajectory, rising sharply on the news of the attack and then retreating as it became apparent that fears that Iran’s actions Tuesday night marked the beginning of a war with the U.S. were misplaced.

By 10:30 p.m., the message from financial markets matched that of President Trump: “All is well.”