US Stocks Likely To Rebound After Sharp Decline Amid Israel-Iran Conflict: S&P 500 Historically Moves Hig

U.S. stock futures were trading higher on Monday following Friday’s sharp declines. Futures of major benchmark indices were higher in premarket.

Iran retaliated against Israel's Operation "Rising Lion," which began on Thursday, following which President Donald Trump issued a stern warning to Iran. He stated that any attack on U.S. forces or land would be met with an unprecedented military response in a Truth Social post.

The 10-year Treasury bond yielded 4.43% and the two-year bond was at 3.97%. The CME Group's FedWatch tool‘s projections show markets pricing a 99.8% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.

Futures	Change (+/-)
Dow Jones	0.39%
S&P 500	0.45%
Nasdaq 100	0.55%
Russell 2000	0.86%

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Friday. The SPY was up 0.38% at $599.25, while the QQQ advanced 0.45% to $529.34, according to Benzinga Pro data.

Cues From Last Session:

S&P 500’s sectors closed in the red on Friday, as financial, information technology, and materials stocks experienced the most significant declines. However, energy stocks defied the broader market trend, ending the session higher.

This came as U.S. stocks settled lower, with the Dow Jones index plummeting over 700 points during the trading day following Israel's unexpected airstrike on Iranian nuclear sites.

Meanwhile, RH (NYSE:RH) shares saw a gain of approximately 7% on Friday. This boost came after the company announced stronger-than-anticipated first-quarter adjusted EPS results and confirmed its commitment to its current FY25 guidance, despite ongoing uncertainties from tariffs and macroeconomic events.

On the economic front, the University of Michigan's consumer sentiment index rose to 60.5 in June, up from 52.2 in the preceding two months, also surpassing market expectations of 53.5.

The Dow Jones index ended 770 points or 1.79% lower at 42,197.79, whereas the S&P 500 index fell 1.13% to 5,976.97. Nasdaq Composite declined 1.30% to 19,406.83, and the small-cap gauge, Russell 2000, tumbled 1.85% to end at 2,100.51.

Index	Performance (+/-)	Value
Nasdaq Composite	-1.30%	19,406.83
S&P 500	-1.13%	5,976.97
Dow Jones	-1.79%	42,197.79
Russell 2000	-1.85%	2,100.51

Insights From Analysts:

As major U.S. equity benchmarks fell on Friday due to heightened tensions between Israel and Iran, LPL Financial’s analysis of 25 wars over seven decades suggests long-term gains for the S&P 500 index.

Jeff Buchbinder, Chief Equity Strategist at LPL, noted, “Assuming no imminent recession, which is LPL Research's base-case scenario, history shows that markets are roughly flat over the next month following these geopolitical and economic shocks, but frequently move higher over the following three, six, and 12-month periods. In the case of an event near a recession, such as Iraq's invasion of Kuwait in 1990 and 9/11, stocks have almost always moved lower in the subsequent 3, 6, and 12 months.”

Ed Yardeni from Yardeni Research said,” The S&P 500 is now in the middle of the Middle East,” and advised investors to buy the dip.

“We anticipated this development in last Thursday’s QuickTakes and recommended using any selloff in the stock market as a buying opportunity,” he said.

Conversely, Louis Navellier of Navellier & Associates highlighted a significant market concern: “The primary fear is that the fighting spreads to other countries and U.S. military bases in the region.”

Meanwhile, Nigam Arora from The Arora Report maintained that the “Israel Iran war is not a risk.”

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on this week:

On Monday, June’s Empire State manufacturing survey will be released by 8:30 a.m. ET.
On Tuesday, May’s U.S. retail sales and import price index will be out by 8:30 a.m. ET.
May’s industrial production and capacity utilization will be announced by 9:15 a.m. ET.
April Business inventories data and June’s home builder confidence index data will be released at 10:00 a.m. ET.
On Wednesday, May’s housing starts data, building permits data and the initial jobless claims data for the latest week will be out by 8:3 a.m. ET.
The Federal Open Market Committee will announce its interest-rate decision at 2:00 p.m. ET.
Federal Reserve Chairman Jerome Powell will address a press conference at 2:30 p.m. ET.
On Thursday, markets will remain closed on account of the Juneteenth holiday.
On Friday, June’s Philadelphia Fed manufacturing survey will be out by 8:30 a.m. and May’s U.S. leading economic indicators will be released by 10:00 a.m. ET.

Stocks In Focus:

Renew Energy Global PLC (NASDAQ:RNW) rose 1.62% in premarket on Monday as analysts expect it to report quarterly earnings of 96 cents per share on revenue of $351.85 million, before the opening bell.
Lennar Corp. (NYSE:LEN) was up 0.63% ahead of its earnings, which are supposed to be released after the closing bell. Analysts expect earnings of $1.94 per share on revenue of $8.16 billion.
PowerFleet Inc. (NASDAQ:AIOT) jumped 6.29% as analysts expect it to report a quarterly loss of 2 cents per share on the revenue of $103.59 million, before the opening bell.
Digital Turbine Inc. (NASDAQ:APPS) advanced on its earnings, which are supposed to be released after the closing bell. Analysts expect earnings of 4 cents per share on revenue of $116.64 million.
Johnson Controls International PLC (NYSE:JCI) gained 1.30% after it reported a $9 billion increase to its share repurchase program.
Unusual Machines Inc. (NYSE:UMAC) was 1.89% higher after the company agreed to acquire Rotor Lab in an all-stock deal valued at $7 million on Friday. The company also announced the termination of the definitive agreement to acquire Aloft.
Urogen Pharma Ltd. (NASDAQ:URGN) edged up by 3.74% after the FDA approved ZUSDURI for intravesical solution as the first and only medication for recurrent low-grade intermediate-risk non-muscle invasive bladder cancer.

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading lower in the early New York session by 0.53% to hover around $70.91 per barrel.

Gold Spot US Dollar rose 0.41% to hover around $3,418.45 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was lower by 0.22% at the 97.9660 level.

Asian markets ended higher on Monday as South Korea's Kospi, China’s CSI 300, Hong Kong's Hang Seng, Australia's ASX 200, Japan's Nikkei 225, and India's S&P BSE Sensex indices advanced. European markets were higher in early trade.

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