S&P futures will benefit as Trump delays decisions on Iran’s strike
New York City Wall Street Sign American Flag and New York Stock Exchange Background by Kasto80 via ISTOCK
The June S&P 500 E-Mini Futures (ESM25) rose 0.15% this morning as cash trading resumed after a June holiday, with investors digesting the White House signalling that President Trump would delay his decision to launch a strike against Iran.
The conflict between Israel and Iran has entered two weeks, with Israel hitting more nuclear sites in Iran on Thursday warning that its strike could defeat Tehran’s leadership. On Thursday afternoon, White House press chief Caroline Leavitt said President Trump will decide whether the US will take part in a strike against Iran within two weeks. The news eased immediate concerns about US military escalation and provided some relief to investors.
The Federal Reserve did not change interest rates on Wednesday, although widely expected. The Federal Open Market Committee voted unanimously to keep the federal funding rate in the 4.25%-4.50% range at its fourth consecutive meeting. In a statement after the meeting, authorities said “uncertainty about the economic outlook has declined, but it remains rising.” Policymakers also released updated quarterly rate forecasts and economic forecasts, predicting higher inflation and unemployment while reducing estimates of economic growth this year. The median forecasts for two interest rate cuts this year remained unchanged, but authorities expect fewer cuts in 2026 and 2027.
At a press conference, Fed Chairman Jerome Powell reiterated his view that the central bank “is well positioned to wait for more on potential economic courses before considering adjusting its policy stance.” Powell also said rising tariffs are likely to increase prices, warning that the impact on inflation could be more sustained.
“They are clearly in standby mode, they are sitting in their hands and checking if tariffs are increasing inflation or if the job market is beginning to decline.
Wall Street’s main indexes were mixed during Wednesday’s trading session.MasterCard (MA) led the losers in the S&P 500 by sliding over -5%, while Visa (v) fell over -4% to lead the Dow losers amid continuing concerns about the impact of Stablecoins on credit card issuers. Also, after Stifel downgraded inventory and retained it from purchase, Zoetis (ZTS) slid over -4%. Additionally, LA-Z-Boy (LZB) exceeded -1% after furniture manufacturers posted a weaker FQ4 adjustment EPS than expected and issued soft FQ1 revenue guidance. On the bullish side, Coinbase (Coin) surged over +16%, and was the top profit of the S&P 500 after the Senate passed the Genius Act.
A Labor Bureau report on Wednesday showed that the number of Americans applying for their first unemployment claim over the past week has fallen from -5K to 245K compared to the expected 246K. Also, US homes will begin at 5-year m/m, which plunged to -9.8%m/m, weaker than expected at 1.350m, but the building permit, a proxy for future construction, fell at -2.0%m/m/m/m/m/m, which is weaker than expected at 1.420m.
Meanwhile, Wall Street is preparing for a quarterly event known as the “triple witch,” during which derivatives have expired contracts for stocks, index options and futures, urging traders to roll their current position or start a new position. Estimates from Citi show that $5.8 trillion of prominent open profits beyond the stock are now expired. This includes $4.2 trillion indices options, $708 billion bets on US ETFs and $819 billion in single-stock options. Rocky Fishman, founder of research firm ASYM 500, estimated a bigger figure of around $6.5 trillion.
In terms of economic data, investors will focus on the Philadelphia US Fed Manufacturing Index, which is expected to be released within hours. On average, economists predict that the Philadelphia Fed’s production index in June will be -1.7 compared to the value of -4.0 last month.
The conference committee’s major US economic index will also be released today. Economists expect the May figure to be -0.1%m/m compared to the previous -1.0%m/m number.
In terms of revenue, notable companies such as Accenture (ACN), Kroger (KR), Darden Restaurants (DRI), and Carmax (KMX) are planning to release quarterly results today.
US fare futures are priced at the next central bank meeting in July with a 91.7% chance of a 25 basis point rate reduction and an 8.3% chance of a 91.7% chance of a 25 basis point rate reduction.
In the bond market, the benchmark 10-year US Treasury bond yield was 4.403%, up +0.16%.
The Euro Stoxx 50 index rose +0.77% this morning, snapping a three-day winning streak as sentiment improved after the White House downplayed speculation that the US was close to Israel on a strike against Iran. Travel stocks led profits on Friday. Chip stock also gained ground. Still, the benchmark index is on track for its first consecutive weekly drops since the beginning of April. Meanwhile, the European Foreign Minister is scheduled to meet with Iranian authorities in Geneva on Friday, urging them to escalate. Economically, data from the Bureau of National Statistics on Friday showed that monthly retail sales in the UK fell far lower than expected in May. Separately, the data showed a slight decline in French manufacturing environmental indicators in June. Investor focus is now on preliminary consumer trust data for the eurozone for June, scheduled for the second half of the session. In Corporate News, TUI AG (TUI1.D.DX) rose more than +4% after Barclays double-upgraded its stock from overweight, citing strong demand for packaged travel. At the same time, Berkeley Group Holdings Plc (BKG.LN) plummeted over -7% after HomeBuilder announced the management change.
UK retail sales, UK core retail sales, German PPI and French business research data were released today.
UK retail sales were -2.7%m/m and -1.3%y/y, weaker than expected at -0.5%m/m and +1.7%y/y.
UK core retail sales reach -2.8%m/m and -1.3%y/y, weaker than expected at -0.5%m/m and +1.8%y/y.
Germany’s May PPIs are reported at -0.2%m/m and -1.2%y/y, compared to forecasts of -0.3%m/m and -1.2%y/y.
France’s June business survey came to 96, weaker than expected.
Today, Asian stock markets settled in the red. China’s Shanghai Composite Index (SHCOMP) closed -0.07%, while Japan’s Japan 225 Stock Price Index (NIK) closed -0.22%.
China’s Shanghai Composite Index has been closed slightly today. The conflict between Israel and Iran is now in its second week and has continued to rattle investors’ trust. Investor sentiment has been curtailed by the lack of concrete policy signals from the Luziazui Forum this week, and is looking for more critical indications of economic support measures, focusing on the upcoming July political meeting. The benchmark index fell by a week. Meanwhile, China stabilized its benchmark lending rates as expected on Friday. After the previous month’s cuts aimed to offset the impact of trade tensions with the US, the one-year loan prime rate remained at 3.0%, and the five-year LPR remained at 3.5%. Other news said the European Union intends to remove Chinese companies from purchasing medical devices from the Bloc government after EU manufacturers determine that there is no equal access in China, and it intends to further expand trade tensions between Brussels and Beijing. In Corporate News, Pop Mart International Group slipped over -3% after Chinese state media commentary urged stricter regulations on blindbox toys and trading cards to prevent potential addiction for children to buy mysterious items.
Japan’s Nikkei 225 stock index ended low today as inflation data reduced emotions, which was hotter than expected, when tensions between the country and the Middle East attenuated emotions. Video games and industrial stocks led the decline on Friday. Despite Friday’s decline, the benchmark index surpassed the week. Government data released on Friday showed that Japan’s core inflation accelerated to a fresh two-year high in May, surpassing the Bank of Japan’s 2% target for more than three years, but may not promptly urge rate hikes as the country’s central bank waits to assess the outcomes of US trade talks. Tariff-related uncertainty makes it more difficult to measure the right timing to raise prices to reduce price pressure, which makes BOJ’s policy stance persistently complicated. Meanwhile, in minutes after the central bank’s April 30-May 1 policy meeting released on Friday, it was shown that BOJ’s policy committee members said it was appropriate to maintain their stance in favor of an additional interest rate hike as actual interest rates are deeply negative and the 2% inflation target is achievable. BOJ Governor Huadang said on Friday that central banks will continue to raise interest rates if economic improvements continue to support sustained achievement of the 2% inflation target. On the trade front, Japan’s top trade negotiator Tokuzaki Ryosei said on Friday that trade talks with the US “left in fog” despite the continued efforts of both sides to reach an agreement. Other news reports that Sunday’s Treasury will discuss JGB issuance with today’s primary dealers and institutional investors on Monday, and that investors may consider cutting JGBs for 20, 30 and 40 years while increasing the supply of two-year bonds. Given the implicit volatility of the Nikkei 225 option, the Nikkei Volatility Index rose +1.59% to 25.60.
Japanese people may have a national core CPI of +3.7%y/y, which is stronger than expected at +3.6%y/y.
US pre-stock market companies
GMS Inc. (GMS) surged more than 19% in pre-market trading after the Wall Street Journal reported Home Depot had made an offer to the company.
Circle Internet Group (CRCL) extended its profits on Wednesday after the Senate passed the Genius Act, surged more than +11% in pre-market trading. Seaport Research has also begun stock compensation with a purchase rating and a price target of $235.
Mondelez International (MDLZ) rose almost 1% in pre-market trading after Wells Fargo upgraded its shares from equal weights with a price target of $78.
Smith & Wesson Brand (SWBI) plunged more than -13% in pre-market trading after gunmen recorded weaker FQ4 results than expected.
Johnson Controls (JCI) fell about -0.9% in pre-market trading after Oppenheimer downgraded its shares.
You can see more Pre-market inventory movement here
On the date of publication, Oleksandr Pylypenko had no position (directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published barchart.com
