U.S. stock futures managed to tick higher Sunday as investors dealt with a multitude of issues, including Iran’s missile and drone strike on Israel and a spike in equity market volatility that sent the Dow Jones Industrial average to its worst week of the year last week.
Futures tied to the Dow Jones Industrial Average rose 90 points, or 0.2%. S&P 500 futures added 0.2% and Nasdaq-100 futures advanced 0.3%.
Gold futures pulled back slightly at $2,373 an ounce. Bullion hit a record level last week and is up 15% this year as investors seek safety from sticky inflation and geopolitical tensions.
The Dow lost 476 points and the S&P 500 posted its worst day since January on Friday on lingering inflation concerns and a poor start to the first-quarter earnings reporting season. The losses caused the Dow to shed 2.4% last week for its worst week since March 2023 and its second down week in a row. The S&P 500 slid 1.5% for its worst week since October 2023. The Nasdaq Composite Index posted its third negative week in a row.
Iran launched drones and missiles on Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While the majority of the threats were intercepted, concerns of retaliation remain.
Oil prices, which have risen in the last few weeks prior to the attack on the rising Middle East tensions, were slightly lower Sunday.
“This remains a dangerous situation, but risks to oil and markets may be a bit less than feared Friday on the eve of the attack,” Krishna Guha, Evercore ISI senior managing director and head of the Global Policy and Central Bank Strategy Team, wrote in a Sunday note.
Guha added that the a key question remaining is how Israel Prime Minister Benjamin Netanyahu will respond to the attack. The Biden administration has made it clear it does not want Israel to retaliate, noted Guha.
“Provided that Netanyahu looks like he is willing to follow U.S. advice, there may be some element of a relief rally in markets Monday. However, our colleagues in the energy team do not expect a big retracement in the price of oil,” said Guha.
On the earnings front, investors will be watching for Goldman Sachs and M&T Bank results Monday morning. More economic data is also scheduled for release. Retail sales data is scheduled for Monday, as well as business inventories data for February and manufacturing numbers for March.
Treasury yields were jumping for most of last week amid a third-straight hotter-than-expected CPI reading. However, rates eased on Friday as investors bought Treasuries as a safe haven from the geopolitical tensions. Prices move inversely to yields.
While JPMorgan Chase bested analysts’ profit estimates in its first-quarter report Friday, investors sent the shares 6% lower on concern about what it may generate from lending in the year ahead. CEO Jamie Dimon also raised concerns about the “unsettling” global landscape and “persistent inflationary pressures.”
Oil prices fall slightly after Israel fends off large-scale aerial attack by Iran
U.S. crude oil futures were slightly lower Sunday as traders breathed a sigh of relief after Israel fended off a large-scale air assault by Iran and the U.S. emphasized it wants to avoid a wider war in the Middle East.
The West Texas Intermediate contract for May lost 34 cents to $85.32 a barrel as trading began Sunday evening. June Brent futures eased slightly to $90.18 a barrel. U.S. crude closed at $85.66 a barrel Friday, while the global benchmark settled at $90.45. WTI futures began the year around $71 a barrel.
Iran launched more than 300 drones and missiles against military targets in Israel on Saturday in an attack that President Joe Biden described as “unprecedented.” Though significant in scale, the Iranian attack caused little actual damage in Israel.
— Spencer Kimball
Cryptocurrencies fall on increased Middle East tensions
Bitcoin and other cryptocurrencies sold off heavily Saturday night after Iran launched an unprecedented drone and missile attack on Israel.
As of Sunday evening, Bitcoin was trading near $65,000. It managed to rebound partially from its losses on Saturday, when it fell below $62,000 from around $70,000. This marked the steepest sell off for bitcoin in over a year.
Other coins like ether also saw heavy selling, down by up to 10% in some cases.
— Hakyung Kim, Matt Clinch
Stock futures open flat Sunday
U.S. stock futures were little changed Sunday night.
Dow Jones Industrial Average futures traded near the flatline. S&P 500 futures ticked up 0.02%, while Nasdaq 100 futures inched down 0.03%.
— Hakyung Kim
First direct attack on Israel from Iranian territory Saturday
Iran fired 300 drones and missiles toward Israel on Saturday night in retaliation for a suspected Israeli strike killing top Iranian officials in Syria. The strike was the first direct attack on Israel from Iranian territory.
The Israeli government said it identified 300 types of drones and missiles, and managed to intercept “99%” of those bound for Israeli territory, per an Israel Defense Forces spokesperson.
— Hakyung Kim
Source: CNBC
