U.S. stock futures rose on Monday, rebounding from last week’s sell-off following strong Goldman Sachs earnings and hopes that the conflict in the Middle East won’t further escalate. Futures tied to the Dow Jones Industrial Average climbed 319 points, or 0.8%. S&P 500 and Nasdaq-100 futures each added around 0.8%. Iran launched drones and missiles on Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While the majority of the threats were intercepted, concerns of retaliation remain. Gold futures advanced slightly to trade at $2,376.30 an ounce. Bullion hit a record level last week and is up around 15% this year as investors seek safety from sticky inflation and geopolitical tensions. But oil prices fell despite rising in the last few weeks prior to the attack amid growing Middle East tensions. That, along with the potential for Israel’s response to be measured given the country thwarted the attack, offered positive signs for traders. “Historically, geopolitical shocks cause short-term volatility, not long-term market declines,” said Emily Bowersock Hill, CEO of Bowersock Capital Partners. “In this current environment, however, the risk of an extended period of volatility is higher, given the inflationary oil price shocks that may emanate from the heightened tensions in the Middle East.” How Israel Prime Minister Benjamin Netanyahu will respond to the attack is a key outstanding question, said Krishna Guha, Evercore ISI senior managing director, in a Sunday note. The Biden administration has made it clear it does not want Israel to retaliate, he noted. “Provided that Netanyahu looks like he is willing to follow U.S. advice, there may be some element of a relief rally in markets Monday,” Guha said. “However, our colleagues in the energy team do not expect a big retracement in the price of oil.” Goldman Sachs popped more than 3% in premarket trading after beating Wall Street expectations on both lines in the first quarter. That follows several bank reports on Friday, with investors sending JPMorgan shares 6% lower amid concerns about what the financial giant may generate from lending in the year ahead. Retail sales increased 0.7% for the month of March, according to Census Bureau data, providing the latest indication that consumption remains strong in spite of inflationary pressures. That pace was higher than the 0.3% consensus forecast of economists polled by Dow Jones. Monday’s premarket action also comes of the heels of a tough week on Wall Street, as lingering inflation concerns and a poor start to the new corporate earnings season weighed on investors. The Dow fell more than 2%, marking its second down week in a row and biggest lost since March 2023. After posting its largest drop since January on Friday, the S&P 500 ended the week lower by about 1.5% — its worst performance since October 2023. Treasury yields jumped Monday as investors reacted to a hotter-than-expected retail sales report, while rising geopolitical tensions prompted buying in safe haven assets. The yield on the 10-year Treasury rose by more than 11 basis points at 4.614%. The 2-year Treasury yield last added nearly 7 basis points, sitting at 4.95%. Asia-Pacific markets fell Monday as traders weighed the impact of Iran’s massive drone and missile attacks on Israel over the weekend, with focus also on key economic data from China and Japan later in the week. Japan’s Nikkei 225 fell 0.74%, paring some losses, to close at 39,232.8, while the broad-based Topix was down 0.23% at 2,753.2. South Korea’s Kospi slid 0.42% to finish at 2,670.43, while the small-cap Kosdaq dropped 0.94%, closing at its lowest level since Feb. 13. In Australia, the S&P/ASX 200 saw a smaller loss compared to the other Asian markets, down 0.46% at 7,752, and declining for a third straight day. However, mainland China’s CSI 300 bucked the trend to jump more than 2%, marking its largest one-day gain since Feb. 6 and ending at 3,549.08. Hong Kong’s Hang Seng index was last down 0.55%. U.S. crude oil futures were lower Monday as traders breathed a sigh of relief after Israel fended off a large-scale air assault by Iran and the U.S. emphasized it wants to avoid a wider war in the Middle East. The West Texas Intermediate contract for May lost 99 cents to $84.67 a barrel. June Brent futures eased 92 cents to $89.53 a barrel. U.S. crude closed at $85.66 a barrel Friday, while the global benchmark settled at $90.45. WTI futures began the year around $71 a barrel. Gold prices prices rose on Monday, hovering near record-high levels hit in the previous session, as traders kept a close eye on developments surrounding the Middle East conflict, prompting safe-haven buying of assets such as bullion. Spot gold was up 0.6% at $2,357.79 per ounce after hitting an all-time high of $2,431.29 on Friday. U.S. gold futures were up 0.04% at $2,375.10.
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