SPX: S&P 500 Futures Trade Sideways as Markets Await Iran’s Response After US Bombing

Stocks were patient (and a bit reluctant) to kick off the trading week with investors largely in wait-and-see mode.

📉 S&P 500 Futures Drop

• Futures contracts tied to the S&P 500 (SPX) were treading water Monday morning after the US this weekend struck nuclear sites in Iran. Thankfully for the weak hands, who would’ve rushed to panic-sell their stocks, weekend trading isn’t a thing yet.
• Moods have stabilized ahead of Monday’s opening bell with S&P 500 futures down by about 0.3%. Dow Jones Industrial Average futures had slipped 120 points and Nasdaq Composite were off by 0.3%.
• Volatility today is bound to persist throughout the session as all equity bros (and market participants broadly) wait to see what Iran’s response to the attack will be.

📢 Breakdown: Warwafe Jitters

• What exactly happened? The US practically entered the war between Israel and Iran when it bombed three of Iran’s nuclear sites on Saturday — Fordo, Isfahan, and Natanz. It was a surprising move that arrived shortly after Trump said he would make a decision whether to attack Iran “within the next two weeks.”
• World markets were somewhat confusing to start trading today. Oil (ticker: OIL) surged, the US dollar advanced across the board but later pared back the gains and turned red, and gold prices (XAUUSD) dipped 0.4% in the first deals.
• Trump telegraphed he’s now open to peace talks. “There will be either peace, or there will be tragedy for Iran far greater than we have witnessed over the last eight days,” he said late Sunday. But it’s not clear whether Iran’s leader, Ayatollah Ali Khamenei, won’t be looking for revenge.

👀 Things to Watch Out for

• Looking ahead into the week, it’s a packed five-day trading stretch with lots of big news to digest. Federal Reserve boss Jay Powell will be speaking to Congress with inflation, interest rates, employment and the economy expected to be the key topics of discussion. The testimony takes place on Tuesday and Wednesday.
• The Fed’s preferred inflation gauge — PCE — will reveal on Friday whether price pressures continued to simmer in May. Before that, consumer confidence and GDP data will be out, showing the pace of consumer spending and economic activity.
• On the earnings front, sport apparel giant Nike NKE is on deck for a quarterly update on Thursday. Other notable companies slated to report performance this week include Micron MU, FedEx FDX, and Carnival CCL.