US Stocks Likely To Open Lower As Israel Strikes Iran: Geopolitical Risks Offers Upside For Dollar, Say Experts

U.S. stocks could open on a negative note on Friday after closing higher on Thursday. The decline comes amid Israel's pre-emptive strikes on Iran and retaliatory attacks from Iran, raising concerns about a further rise in tensions in the Middle East, impacting supply routes.

President Donald Trump once again threatened to impose unilateral tariffs within two weeks if the U.S.'s trade partners don't agree to a deal.

"At a certain point, we're just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it," Trump told reporters at the John F. Kennedy Center for the Performing Arts.

In premarket trading on Friday, the SPDR S&P 500 ETF Trust SPY declined 1.23% to $596.34 and the Invesco QQQ ETF QQQ declined 1.49% to $525.73, according to Benzinga Pro data.

Cues From Last Session:

U.S. stocks ended Thursday on a mixed note, with the major indices in the green and the Russell 2000 ending in the red.

Crude oil surged to over $73 amid the Israel-Iran conflict.

Boeing Co. BA declined by nearly 5% after an Air India Boeing 787-8 Dreamliner carrying over 200 passengers crashed on Thursday near the Ahmedabad airport in India.

Most sectors on the S&P 500 closed on a positive note, with only consumer discretionary, industrials, and communication services ending lower. Utilities, information technology and health care recorded the highest increase.

Insights From Analysts:

While equities could bear the brunt of an increase in geopolitical risks and tensions in the Middle East due to the Israel-Iran conflict, analysts at ING said that this could create some room for a brief rebound in the U.S. dollar.

"In other conditions, the DXY rally would likely be much larger than the roughly 0.75% rebound from the overnight lows we have seen so far, because the dollar would also benefit from the negative shock in equities and bonds," the research firm said.

The main concern, though, is a spike in oil prices. ING analysts highlighted that an energy price shock could force the Jerome Powell-led Federal Reserve to maintain its cautious stance on interest rate policy, which is something that has irked President Trump and others in his administration.

Upcoming Economic Data

Friday's major economic updates include:

• The preliminary consumer sentiment data for June will be announced at 10:00 a.m. ET.

Stocks In Focus:

• Adobe Inc. ADBE: The digital media company reported record revenue in Q2, beating Wall Street expectations. It raised the full-year revenue guidance to $23.50 billion – $23.60 billion, from $23.30 billion – $23.55 billion.
• Boeing Co. BA, General Electric Co. GE: Boeing CEO Kelly Ortberg skipped the Paris Airshow, while GE delayed its investor day after the deadly Air India crash took the lives of 241 people.
• Chime Financial Inc. CHYM: Chime stock closed 37% higher on Thursday following a blockbuster debut on the bourses.
• Investors are awaiting earnings results from MoneyHero Ltd. MNY today.

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 7.14% to hover around $72.90 per barrel.

Spot prices of gold rose 1.14% to hover around $3,425.35 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was up by 0.33% at the 98.2400 level.

The 10-year Treasury note yield was slightly down by 0.01%.

All of the major Asian markets were in the red on Friday, with the Taiwan Weighted index plunging the most at 0.97%, followed by the Nikkei 225, which fell 0.90%. Similarly, European markets were in the red at the time of writing.

Read Next:

• Middle East Tensions Rattle Markets: US Stock Futures Slide, Oil Jumps 8%, Gold Surges Above $3,400 After Israel Strikes Iran

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