President Donald Trump will address world leaders Tuesday morning at the United Nations General Assembly annual meeting in New York, where investors will be listening for any market-moving news about the future of the Iran and Ukraine-Russia wars.
Roughly 120 heads of state and government are expected to attend the meeting, according to U.N. spokesperson Stéphane Dujarric. They include Ukrainian President Volodymyr Zelensky, Israeli Prime Minister Benjamin Netanyahu, Iranian President Masoud Pezeshkian, and Venezuela's interim president, Delcy Rodríguez.
Markets don't usually move much on the general assembly. This year's meeting, however, could be different. In addition to the wars, there could be news about potential efforts to stabilize global energy supplies, notes Jay Woods, chief market strategist at Freedom Capital Markets.
"Signs of diplomacy could ease oil prices and inflation fears, while further escalation or disruptions to regional exports could send crude higher, pressure consumers and complicate the Fed's next move," he adds.
Indeed, Brent crude oil prices moved lower on Monday on the basis that Trump was willing to meet with Iran's Pezeshkian. While a single meeting won't resolve the conflict, markets are removing some of the geopolitical premium priced into crude, writes Daniela Hathorn, senior market analyst at Capital.com.
U.S. Ambassador to the U.N. Mike Waltz said Trump will also meet with Venezuela's Rodríguez, who recently struck an oil deal with the U.S. Department of Defense. Trump will meet with Japanese Prime Minister Sanae Takaichi, United Kingdom Prime Minister Andy Burnham, and a group of Gulf Arab heads of state.
That group, set to include Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar, will likely press Trump on providing military assistance in defense against Iran-backed Houthis, who have attacked Saudi's capital city and oilfields in recent days. Gulf monarchies have long relied on the U.S. military for protection, but Iran's successful strikes on various countries' infrastructure has fractured some of the region's confidence in the U.S. This weekend, Trump denied Saudi requests for help in a counterattack against the Houthis, according to the New York Times.
The Gulf leaders will likely be looking for more clarity on how the president plans to wrap up the Iran war, which has led to slowed oil exports through the Strait of Hormuz and major damage to oil pipelines running across Saudi Arabia.
"Against this backdrop, it would be surprising if the Gulf states weren't looking to distribute their diplomatic, defense, and economic eggs across a greater number of baskets," writes Tom Holland, deputy global research director at Gavekal Research.
The president will head to Washington for high-stakes meetings with Chinese President Xi Jinping on Wednesday and Thursday.
Write to emily.russell@barrons.com.
