U.S. stock futures rose on Monday, while oil prices fell and the dollar lost recent gains against global peers, as investors awaited Israel's formal response to an unprecedented missile attack by Iran over the weekend. week.
The dollar rose to a new five-month high against its global peers on Sunday as investors sought safe-haven assets and braced for a week of rising market volatility amid concerns over the prospect of further military conflict. extensive in the Middle East triggered by the Tehran attack. .
Iran said the attack, its first military action aimed directly at Israel's sovereign territory, was launched in retaliation for Israel's April 1 attack on a consular building inside the Iranian embassy compound in Syria, which it said killed several high-ranking officials among the Iranians. Islamic Revolutionary Guards.
Israel, which has not claimed responsibility for the events in Damascus, has vowed to “get a price on Iran… when the time is right for us” after saying it repelled about 99% of the 300 drones and missiles it Tehran launched on Saturday night. .
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TIMOTHY A. CLARY/AFP via Getty Images
“We will build a regional coalition and exact the price from Iran in the way and at the time that is right for us,” said Benny Gantz, a retired army general who is part of Prime Minister Benjamin Netanyahu's cabinet.
Meanwhile, Iran has said it will strike back if the United States or Israel retaliate.
“The president has been very clear: we are not seeking an escalation of tensions in the region. “We're not looking for a broader conflict,” White House national security spokesman John Kirby told ABC's “This Week” on Sunday. “I think the next few hours and days will tell us a lot.”
However, that prospect, which began when Iran-backed Hamas crossed from Gaza and killed and captured 1,200 Israeli citizens on October 7, has the potential to shake global financial markets after a week of increasing volatility linked to the revaluation of interest rates by the Federal Reserve. rate reduction forecasts.
The S&P 500 closed down 75 points, or 1.46%, on Friday, marking its biggest single-day drop since late January and a drop of about 1.55% in a week.
Investors will also have a busy week of corporate earnings, with 41 S&P 500 companies due to report over the next five days, as well as key readings on retail sales, home construction and weekly jobless claims data.
Analysts forecast first-quarter earnings to rise 2.7% year-over-year to $447.3 billion on a share-weighted basis, and second-quarter earnings are estimated to improve to $494.7 billion.
The Commerce Department will also release March retail sales data at 8:30 a.m. ET, and economists expect a modest reduction in the figure to $700.7 billion.
Early indications suggest that markets, for now, are expecting a strong opening for Monday, with futures linked to the S&P 500 indicating an opening gain of 22 points and those linked to the Dow Jones Industrial Average suggesting a gain of 190 points.
Meanwhile, the tech-focused Nasdaq is expecting a 113-point gain despite premarket declines in heavyweights Tesla. (TSLA) and apple (AAPL) .
The US dollar index, which tracks the dollar's performance against a basket of six major currencies, was down 0.15% in early trading at 105.876. Over the weekend it hit its highest level since November 2, suggesting investors are bracing for a week of risk aversion as geopolitical tensions remain simmering.
Gold, another safe haven asset, rose 1.2% in trading on Sunday and changed hands at $2,371.73 an ounce.
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The key indicator of market volatility, the CBOE VIX index, soared 14.55% in after-hours trading to reach a high of $17.08 in late October. That suggests traders expect daily swings for the S&P 500 of about 54 points, or 1.07%, each day over the next month.
“A classic defensive playbook has come into effect as participants reduce exposure and de-risk ahead of the weekend, amid the potential for significant gap risk at Sunday's market open,” Michael said. Brown, senior research strategist at London-based Pepperstone.
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"It is reasonable to expect higher prices when trading resumes.
"That said, there has been no impact on production so far and Iran has said that “the matter can be considered concluded.”
–Tamas Varga, PVMhttps://t.co/AGwTYhp7attwitter.com/hashtag/energy?src=hash&ref_src=twsrc%5Etfw”>#energy twitter.com/hashtag/OOTT?src=hash&ref_src=twsrc%5Etfw”>#expecting twitter.com/hashtag/oilandgas?src=hash&ref_src=twsrc%5Etfw”>#oil and gas twitter.com/hashtag/WTI?src=hash&ref_src=twsrc%5Etfw”>#WTI twitter.com/hashtag/CrudeOil?src=hash&ref_src=twsrc%5Etfw”>#Raw oil… pic.twitter.com/hUQHJdv7eg
– Art Berman (@aeberman12) twitter.com/aeberman12/status/1779533830010831213?ref_src=twsrc%5Etfw”>April 14, 2024
Iran seized an Israeli-affiliated cargo ship, the MSC Aries, near the Strait of Hormuz on Saturday. The Aries, which flies the Portuguese flag, is part of the Zodiac shipping group, owned by Israeli billionaire Eyal Ofer.
Global oil prices, which closed at $90.45 a barrel on Friday after extending their five-month gain to around 32%, fell modestly in early trading hours, with Brent contracts for June falling 52 cents to $89.93 per barrel.
WTI futures for May delivery, which are closely linked to domestic gasoline prices in the United States, fell 71 cents to $85.09 a barrel.
“Crude oil prices already include a risk premium and unless the market faces a real supply disruption, the risk of a rise towards $100 remains limited,” Saxo Bank strategists wrote on Monday. “All eyes on Israel and its response.”
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