US Stocks Likely To Open Lower As Iran Vows Retaliation After US Strike: 'Worst Is Now In The Rear-View Mirror,' Says Top Analyst (UPDATED)

U.S. stock futures dipped into the red after a brief rise Monday morning, as tensions continue to flare in the Middle East, following American airstrikes on Iranian nuclear facilities over the weekend.

Investors are on the edge, with potential for further escalation in the crisis, following Iran’s parliament voting on Sunday to authorize the closure of the Strait of Hormuz.

The 10-year Treasury bond yielded 4.397%, and the two-year bond was at 3.927%. The CME Group’s FedWatch tool‘s projections show markets pricing an 85.5% likelihood of the Federal Reserve keeping the current interest rates unchanged in its next FOMC meeting in late July.

The SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500, and the Invesco QQQ Trust QQQ, which tracks the Nasdaq 100 index, were both trading lower in pre-market by 0.13% and 0.23%, respectively, according to Benzinga Pro data.

Cues From Last Session:

The S&P 500 ended down 0.22% on Friday, with a mixed sector-wise performance. Tech, healthcare, materials, and communications led the decline, while energy, consumer staples, and utilities rose higher, with energy leading the way, up 1.02% during the day.

The Dow Jones Industrial Average was flat during the day, up just 0.08% or 35 points, ending the week at 42,206.82 points, following a volatile session.

Drywall and insulation contractor, GMS Inc. GMS, rallied 23.77% during the day, after becoming an acquisition target of building products company, QXO Inc. QXO, which was followed by a string of hikes in the stock’s price targets, with the high end now at $105, representing a 5% upside from current levels.

The Philadelphia Fed manufacturing survey posted a 4% decline, compared to an analyst consensus of a 2% decline, while the U.S. Leading Economic Indicators release reported a 0.1% decline, in line with forecasts.

The Dow Jones index ended 35.16 points or 0.083% up at 42,206.82, whereas the S&P 500 index fell 0.22% to 5,967.84. Nasdaq Composite declined 0.51% to 19,447.41, and the small-cap gauge, Russell 2000, tumbled 0.17% to end the week at 2,109.27.

Insights From Analysts:

As tensions continued to flare between Israel, the U.S., and Iran, leading analysts remain optimistic regarding the market at the start of the new week.

Leading tech analyst, Dan Ives, shared on Sunday, in a post on X, that the Iran threat was now in the “rear-view” for the markets. He added that the events that took place over the weekend will be seen as “a positive” for growth and stability in the Middle East.

Meanwhile, Iran has vowed to respond to the strikes, declaring it "reserves all options" in the face of U.S. aggression.

Chartered Market Technician, Ryan Detrick, however, cautioned of a pullback in the markets, often seen in late-June or early-July in a post-election year.

“The headlines are the headlines, but don’t forget that late June/early July tends to be weak in a post-election year,” he said on X.

Upcoming Economic Data:

Here’s what investors will be focused on, when markets open on Monday,

• S&P Flash U.S. Services PMI, along with the S&P Flash U.S. Manufacturing PMI, is set to be released at 9:45 AM ET on Monday.
  
• The Existing Home Sales data is set to be unveiled by 10:00 AM.

Stocks In Focus:

• FactSet Research Systems Inc. FDS, a financial data provider, is set to release its third quarter results by 9 AM on Monday morning, before markets open. The stock is up 0.04% pre-market.
  
• Commercial Metas Co. CMC will be announcing its third quarter results by 11:00 AM, and the stock is up 6.20% pre-market.
  
• KB Home KBH, a homebuilding company, is scheduled to announce its second quarter figures after markets close on Monday. The stock is down 0.44% pre-market.
  
• PACS Group Inc. PACS, an operator of skilled-nursing care facilities, is expected to announce its quarterly results after markets close.

Commodities, Gold, And Global Equity Markets:

Crude oil futures are up 0.49% in the early New York session, with prices hovering around $74.19 per barrel, well below the day’s high of $77.13.

Gold Spot US Dollar was down 0.06%, trading at $3,366.61 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index (DXY) spot was up 0.35% at the 99.268 level.

Asian markets were mixed on Monday, with China’s Shanghai and Shenzhen indices up, while Japan’s Nikkei 225, the KOSPI, and India’s Nifty 50 ended the day lower.

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