Markets Unruffled By US Bombing in Iran? Nasdaq, S&P 500 Futures Edge Lower While Oil Spikes Briefly As Analysts Downplay Fallout

Among the Main Street catalysts traders look forward to in the new week are S&P’s flash private sector activity readings for June, the personal income and spending report for May, two June consumer confidence readings, and the weekly jobless claims data.

The escalation in Middle East tensions has not significantly impacted traders' sentiment, with the major U.S. stock futures trading only modestly lower early Monday.

The U.S. bombed three nuclear sites in Iran, with President Donald Trump claiming a “spectacular military success.” Since then, Iraq has launched missile attacks on Israel, which however, have been intercepted. 

Local Iranian media reports said the country was preparing to retaliate, with the nation’s parliament reportedly authorizing the closure of the Strait of Hormuz oil chokepoint.

As of 2:05 a.m., ET, the Dow and Russell 2000 futures slipped over 0.25%, and the Nasdaq 100 and S&P 500 futures were down less than 0.20%.

Stocks closed the holiday-shortened week ended June 20 on a narrowly mixed note. Sentiment remained subdued amid a Federal Reserve pause decision and flaring geopolitical tensions in the Middle East.

For the week, the Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) slipped 0.03% and 0.16%, respectively.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) edged up 0.04%, while the iShares Russell 2000 ETF (IWM) gained 0.43%.

Among the Main Street catalysts traders look forward to in the new week are S&P’s flash private sector activity readings for June, the personal income and spending report for May, which comprises the Fed’s favorite inflation gauge, two June consumer confidence readings, the weekly jobless claims data, and a trio of housing market data.

Also on the radar are Fed Chair Jerome Powell’s semi-annual monetary policy testimony and the advance trade balance report for May.

On Monday, S&P will announce its flash manufacturing and services sector purchasing managers’ indices for June at 9:45 a.m. ET. Both indices are expected to dip from the May levels, although holding above the ‘50’ cut-off mark that separates contraction and expansion. 

The Commerce Department is set to release its new home sales report for May at 10 a.m. ET.

On the earnings front, Commercial Metals (CMC), FactSet (FDS), and KB Home (KBH) are due to report their quarterly results.

Crude oil futures rose above $76-a-barrel during overnight hours but have retreated below $75 since then, gold futures fell modestly, and the U.S. dollar firmed up.

The 10-year U.S. Treasury note yield traded at a sub-4.4% level.

Most Asian markets pulled back on the geopolitical tension, although the Chinese and Hong Kong markets bucked the downtrend with modest gains. 

Tech analyst Daniel Ives shrugged off the escalation in the Middle East, stating that the U.S. bombing has removed a “black swan” event. He recommended big tech winners in the event of volatility.

Meanwhile, Carson Group Chief Market Strategist Ryan Detrick pointed out that with or without the headlines, late June/early July is typically weak in a post-election year. 

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