Stock futures rebounded slightly early Monday as the spike in oil prices due to the escalating conflict between Israel and Iran eased for a moment. Stock gains were muted as investors remained concerned about the rising geopolitical risk to the global economy.
Dow Jones Industrial Average futures jumped 157 points, or 0.4%. S&P 500 futures added 0.4%, while Nasdaq 100 futures rose 0.5%.
WTI crude oil futures fell 0.47% to $72.64 a barrel after trading above $77 earlier in the overnight session.
Traders have been closely watching the Middle East after Israel’s strike on Iran Friday. Iran launched missiles in retaliation, increasing the severity of conflict in the region.
The attacks continued for a fourth day Monday, with the two countries targeting each others’ energy facilities, an escalation which could rattle the global economy and markets further in the new week. Iran said it is considering shutting down the Strait of Hormuz, a key route for the global oil market. Israel claimed on Monday to have achieved “aerial superiority” over Iran, according to a military spokesperson.
The conflict prompted a sell-off in stocks on Friday, with the Dow tumbling more than 700 points in the session. All three of the major indexes dropped more than 1% in the trading day. Friday’s declines pulled the three indexes into red territory for the week. The Dow finished the week down 1.3%, while the S&P 500 and Nasdaq Composite lost 0.4% and 0.6%, respectively.
Oil prices initially surged following Israel’s attack, weighing on risk assets. Gold prices also rallied, as the metal is considered a safe haven trade that investors flock to in times of market volatility.
“The strikes represent the largest attack on Iranian territory since the 1980s,” Ed Mills, Raymond James’ Washington policy analyst, wrote to clients in a note. “The risks of regional escalation are heightened; the extent to which hostilities could spread is likely contingent on the extent of U.S./Russian impacts/involvement in the coming weeks and days.”
All of the ‘Magnificent Seven’ stocks were higher in premarket trading Monday as the pullback in oil prices caused investors to take on more risk again. Tesla was up nearly 2% and Meta was up nearly 1%.
Investors will monitor manufacturing survey data due Monday morning, which comes ahead of the Federal Reserve’s interested rate decision on Wednesday. Fed funds futures are pricing in a nearly 97% likelihood of the central bank keeping rates unchanged, per CME’s FedWatch tool even as President Donald Trump has been pressuring Fed Chief Jerome Powell for a rate cut. Higher oil prices from the Middle East conflict likely further reduce the odds the Fed will ease monetary policy anytime soon.
Crude oil futures fall after surging overnight
Crude oil futures pulled back on Monday despite Israel’s recent attacks on natural gas facilities in Iran exacerbating concerns that the war will disrupt the region’s energy supplies.
U.S. crude oil declined $1.06, or about 1.5%, to $71.92 per barrel after reaching $77.48 a barrel overnight. Global benchmark Brent was last down 90 cents to $73.33 a barrel.
— Spencer Kimball
Asia-Pacific markets rise as investors parse China data, assess Israel-Iran tensions
Asia-Pacific markets rose Monday, as investors assessed escalating Israel-Iran tensions and parsed a slew of data from China.
Data points released by the Asian superpower included its retail sales and industrial output figures for May. Retails sales jumped 6.4% from the previous year, while industrial output growth slowed to 5.8% year on year.
Mainland China’s CSI 300 index ended the day 0.25% higher at 3,873.80, while Hong Kong’s Hang Seng Index added 0.7% to close at 24,060.99.
Japan’s benchmark Nikkei 225 climbed 1.26% to end the day at 38,311.33, while the broader Topix index advanced 0.75% to 2,777.13.
In South Korea, the Kospi index surged 1.8% to close at 2,946.66, while the small-cap Kosdaq increased by 1.09% to 777.26.
Over in Australia, the S&P/ASX 200 ended the day flat at 8,548.40.
Meanwhile, India’s Nifty 50 rose 0.92%, while the BSE Sensex index was up 0.84% as at 1.48 p.m. Indian Standard Time.
— Amala Balakrishner
Oil prices jump after Israel attacks energy facilities in Iran
Crude oil futures jumped more than 3% Sunday evening after Israel hit several energy facilities in Iran over the weekend.
U.S. crude oil was up $2.37, or 3.25%, to $75.35 per barrel by 6:12 p.m. ET. Global benchmark Brent rose $2.42, or 3.26%, to $76.65 per barrel.
Israel hit two natural gas facilities and an oil depot in Iran, raising fears that the war between the two countries will expand to include energy infrastructure in the region.
Oil prices gained more than 7% on Friday after Israel launched a wave of airstrikes against Iran’s nuclear and ballistic missile programs as well as its senior leadership. It was the biggest single-day move for oil prices since March 2022 after Russia invaded Ukraine.
— Spencer Kimball
Stocks ended last week in the red
Stocks are coming off a losing week.
The Dow finished last week down 1.3%, hurt by a slide of more than 700 points on Friday. The S&P 500 and Nasdaq Composite ended the week lower by 0.4% and 0.6%, respectively.
— Alex Harring
Stock futures are down
Stock futures dropped Sunday night as investors continued monitoring escalating conflict between Israel and Iran, which also weighed on the market last week.
Dow futures fell more than 170 points shortly after 6 p.m. ET. S&P 500 and Nasdaq 100 futures each slid 0.4%.
— Alex Harring
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