Day of Reckoning for Iran Is Near, But Market Struggles With Uncertain End Game

The market is lower on Tuesday morning as speculation about the United States' involvement in the Israel-Iran war is building. President Trump has made it clear his paramount goal is to ensure that Iran never has a nuclear bomb, but it is not clear what action — if any — the U.S. will take to achieve that goal. 

Trump says he wants "An end. A real end. Not a ceasefire — an end." However, there is great uncertainty about how that goal will be achieved, and that is causing market pressure on Tuesday morning.

While the market has been pricing in the long-term economic and societal benefits of easing global tensions and eliminating the constant threat of Iranian-sponsored terrorism, there will be short-term costs and chaos as events unfold. Oil is trading higher again as concerns grow about the closing of the Strait of Hormuz, which handles a large percentage of il shipping.

In addition to the uncertainty in the Middle East, the market is also considering a number of economic issues. Retail sales will be reported at 8:30 a.m. ET, and there is a Fed interest rate decision coming up on Wednesday afternoon. The economic bears are convinced we will start seeing slower growth and sticky inflation as the impact of tariffs is felt, but so far, they have been wildly wrong, which they chalk up to premature timing.

Technically, the market is quite challenging. While the indexes are holding up very well, there are pockets of speculative action, momentum has been mixed, and it is tough to find sustained uptrends. What is holding up the market is the high level of skepticism and poorly positioned investors. They are forced to put money to work when the market keeps running higher.

I'm staying very reactive and selective with any new buying. I'm more concerned about protecting gains than I am about putting more money to work.

At the time of publication, Rev Shark had no positions in any securities mentioned.