Wall Street showed gains Monday morning, with stock futures climbing and oil prices dropping significantly after Israel launched targeted military strikes on Iran.
US markets opened with S&P 500 futures up 0.4% and Dow Jones Industrial Average futures gaining 0.3%.
Oil prices fell sharply as investors reacted to Israel’s strikes over the weekend, which focused on military installations rather than Iran’s oil production sites. The conflict had previously sparked concerns that oil infrastructure might be at risk, potentially disrupting supplies. However, the focus on military targets led to a downturn in crude prices, with US benchmark crude dropping $4.22, or 5.9%, to $68.32 a barrel, and Brent crude, the international standard, down $4.23, or 5.6%, at $71.40 a barrel.
Energy sector stocks reflected the broader impact, with several oil companies seeing pre-market declines between 2% and 5%. Amid these changes, investor focus also shifted toward upcoming corporate earnings reports, which have been mostly favorable and provided stability in recent weeks. Over one-third of companies in the S&P 500 have reported earnings, with most exceeding expectations. The financial results from Ford, McDonald’s, and major technology companies like Alphabet, Meta, Microsoft, Amazon, and Apple are anticipated this week.
In global markets, European stocks showed mixed performance. France’s CAC 40 rose 0.1%, Germany’s DAX declined 0.3%, and Britain’s FTSE 100 dropped 0.4%. Meanwhile, Japanese stocks surged as the Nikkei 225 climbed 1.8%, supported by a weakened yen and political developments. Japan’s Liberal Democratic Party, despite losing some parliamentary seats over the weekend, maintained its ruling coalition. Analysts expect Japan’s central bank to hold off on interest rate changes amid this political landscape, with the yen’s decline benefiting exporters like Toyota and Nintendo.
In the US, economic indicators scheduled for release this week include the Personal Consumption Expenditures (PCE) index, a key inflation gauge expected to show easing inflation pressures. Additionally, the Federal Reserve’s ongoing adjustments to interest rates, having recently reached a 20-year high, are expected to remain in focus. Analysts anticipate a potential rate cut in November to further support economic growth. The latest consumer confidence reading and third-quarter GDP estimates are also due this week, providing further insight into economic trends and spending behavior.
With input from CNBC and the Associated Press.
