00:01Geopolitical tension, ceasefire talks, and volatile energy markets are raising new questions
00:07about what comes next for investors, consumers, and the global economy as a whole as we head
00:12into this summer. Joining us now is Rob Schroeder, Washington Bureau Chief at MarketWatch. Thank
00:17you so much for being here, Rob. Thank you. Now, we know the situation is pretty much
00:22constantly changing over in the Middle East and in Washington. So tell us what we're seeing
00:27right now in terms of the ceasefire, the most immediate market reaction as well to what
00:32is happening over there and here in Washington. Yeah, the very latest, Justine, is that Iran
00:39has said it has stopped negotiations with the U.S. and is vowing to block the Strait of Hormuz.
00:46Now, this came from the state media of Iran. We here in Washington at MarketWatch and elsewhere,
00:54I'm sure in the city, are trying to confirm this with the White House. We have not yet heard back
01:01from the Trump administration on this. But if you're watching the markets, you can pretty much
01:06see how this is all going over, which is not very well. Yeah, I mean, I was going to say
01:12this seems
01:12like, again, this constant uncertainty is really what's driving the problem here because people
01:16just don't know what's going to happen next. We also saw that post from Truth Social from Donald Trump
01:21saying that things are going to be okay. And now again, we're hearing something different from
01:26Iran. So what does this leave us with as we look to try to figure out what's actually happening here?
01:32Yeah, I think we can expect more diplomacy to continue, notwithstanding what the Iranian side
01:40has said. President Trump, as you noted, did post something on Truth Social last night saying that
01:46Iran did want to make a deal. I think that it's certainly in the interest of both countries to
01:52make a deal. The world oil market and consumers of gasoline, rather, all depend quite greatly on
02:00the outcome of these negotiations. So I would expect them to restart. I can't say when, but it's been
02:08a fairly, fairly long slog here. And we have oil shooting up, at least WTI, that is, shooting up this
02:17morning, close to 8% as we speak. So that's expensive and painful for consumers around the world
02:28who fill their tanks with gasoline. So you've got to assume that this has the administration's
02:38attention and that they're working to get these talks back on track. Yeah, I mean, that 8% jump
02:44is pretty significant. How does that compare with the other jumps that we've seen since this conflict
02:50started? Yeah, absolutely. I mean, we've certainly seen little spikes. We've seen bigger spikes. This
02:57is one of the more attention-grabbing ones, you could say. Stocks are down, the Dow is down about 240
03:05points at the moment. We've seen much bigger than that, however. And the NASDAQ, as it happens,
03:11is, which is tech-heavy, as your viewers know, the NASDAQ happens to be up, as we speak right now,
03:17here on Monday morning. I think the markets have baked in some sort of resolution to this.
03:25You did see recently oil falling these past weeks, really. The Dow and the S&P has been steadily up.
03:41Oil has been recently down about 7% over the last five days. So some sort of a resolution is
03:48expected,
03:49and I think that these fits and starts can be expected and baked into the cake, if you like.
03:58At some point, I think this will get resolved, but it doesn't look like that's going to be today.
04:03Right. It seems like that resolution just keeps getting pushed a little bit farther,
04:07a little bit farther every time we hear the latest news. Again, we had that ceasefire. Then both sides
04:11have accused the other side of breaking the ceasefire. Iran continuing to accuse the U.S.
04:17of locating Iranian ports. Where do you think this is going to go when we look at what our markets
04:22could look like in just a few weeks, again, as we head into the summer season, which sees a lot
04:27more
04:27travel, a lot more activity? Well, I think one of the key things to watch, really, as we kick off
04:35summer and after Memorial Day is going to be that price of oil. Summer driving season,
04:42it's often called as families and individuals take summer vacations. We Americans do like to drive
04:51our cars long distances. So a year ago, the average for gasoline was just above $3. Currently,
04:59it's about a dollar higher. It's $4.30 some cents a gallon. So that may directly affect consumers'
05:09plans for this summer, their plans to drive long distances. And I think you're going to have
05:19families looking very closely at what this conflict means for them as they make their plans for the
05:27coming months. So certainly, the Trump administration and Congress are aware of that.
05:32The desire to make a deal will be there. But President Trump has drawn some red lines on
05:39this, as he and his top officials keep saying. They don't want to see Iran get a nuclear weapon.
05:44And that is going to be really a key part of this deal. So that's the space to watch. And
05:52until he's
05:53satisfied with that, I don't think we'll see, you know, a deal coming out of the White House
06:00today or tomorrow. Yeah, I mean, that piece of the puzzle is so important, obviously. Thinking about
06:05the, you know, people who might be heading out on the road, drivers, again, seeing that increased
06:09price at the pump. What about when it comes to air travel? As we know, again, people heading to Europe
06:14or other destinations for the summer. How is the oil price going to affect them, especially since it
06:19was dropping a little bit, but now we're seeing that spike again? Yeah, that's a great point. We reported
06:25in the last inflation report that airlines, airfares have certainly gone up, even with oil having
06:34dropped. I mean, these decisions and these prices are not set in a day or a week. It does take
06:42longer.
06:43So you don't want to see any sort of spike in oil prices, a sustained spike for too long a
06:50period of time.
06:51But now that we're having this new stop and halt in negotiations, certainly the threat is there.
07:01So plan accordingly. Right. Plan accordingly. Again, so tough to do with all of this volatility
07:07that we've been talking about. Do you think that that volatility is being driven almost entirely by
07:13this geopolitical uncertainty? Or do you think that there are broader economic concerns here at play as
07:18well? Well, certainly inflation is always is always a worry. And the Federal Reserve is often
07:26and is supposed to look past these oil shocks and energy shocks, so to speak. But it's certainly
07:35playing a larger part. Inflation worries that is in the bigger economic picture. And it's also rather
07:44it's it's almost entirely, I think, due to what's happening geopolitically here with the Iran war,
07:52the Iran conflict. So this is a key to to what's happening right now. And once you take that away,
07:59it'll be a great relief. But as we've discussed, we have no way of knowing exactly when that's going to
08:05happen. Of course. And there are so many factors that we've talked about here, all kind of interwoven
08:11together as we look at the bigger picture. What do you think investors and consumers should be
08:16watching most closely over the next few months as we see what develops abroad and in Washington?
08:23Well, really, this is the key. I think it's all what we've been talking about. The the war started in
08:28late February. It's now the beginning of June. So how this plays out will be critical for inflation,
08:35for interest rates, for portfolios. Although, as I mentioned, I think the stock market has
08:44not exactly looked past the war, but it has hit records here day after day on anticipation
08:53that there'll be a quick well, a near term resolution to the conflict. And the S&P
09:02was up close to 2% over the last five days and 5% or so over the last month.
09:09So the stock market
09:11looks to the future and it does see a sort of resolution coming. So that's, I think, what what
09:19consumers and investors and businesses are going to most be focused on is the trajectory of the end of
09:26the war. And if inflation can get under control, because obviously that eats into consumers pocketbooks.
09:34And if consumer spending goes down, then that's bad for the economy. Definitely so many different
09:39pieces of the puzzle to keep in mind here, but we will keep our eye on all of it as
09:43we move forward.
09:44Rob Schroeder, Washington bureau chief at MarketWatch. Thank you so much for being here,
09:48and we hope to have you back again soon. Thanks very much.
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