The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a lower open on Tuesday, with stocks likely to move back to the downside following the rebound seen in the previous session.
Traders may look to cash in on yesterday’s strong gains amid renewed concerns about the ongoing clash between Israel and Iran.
While reports hinting at an end to hostilities contributed to a rally on Monday, news that President Donald Trump left a G7 summit early to focus on the conflict has led to worries about further escalation.
In a post on Truth Social. Trump said French President Emmanuel Macron mistakenly said he left the summit in order to work on a cease fire between Israel and Iran.
“He has no idea why I am now on my way to Washington, but it certainly has nothing to do with a Cease Fire,” Trump said. “Much bigger than that.”
The downward momentum on Wall Street also comes following the release of a Commerce Department report showing U.S. retail sales fell by more than expected in the month of May.
The Commerce Department said retail sales slid by 0.9 percent in May after edging down by a revised 0.1 percent in April.
Economists had expected retail sales to decline by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.
Excluding a steep drop in sales by motor vehicle and parts dealers, retail sales fell by 0.3 percent in May after coming in unchanged in April. Ex-auto sales were expected to inch up by 0.1 percent.
After moving sharply higher early in the session, stocks gave back some ground over the course of the trading day on Monday but continued to turn in a strong performance. With the upward move, the markets largely offset the steep losses seen during Friday’s session.
The major averages all ended the day firmly in positive territory, with the tech-heavy Nasdaq posting a standout gain. The Nasdaq jumped 294.39 points or 1.5 percent to 19,701.21, the S&P 500 advanced 56.14 points or 0.9 percent to 6,033.11 and the Dow climbed 317.30 points or 0.8 percent at 42,515.09.
The early rally on Wall Street came as traders looked to pick up stocks at somewhat reduced levels following the previous session’s nosedive, which came after Israel launched a series of airstrikes against Iran.
While the clash between Israel and Iran continued over the weekend, traders appear optimistic the conflict will remain relatively contained.
A report from the Wall Street Journal citing Middle Eastern and European officials said Iran has been urgently signaling that it seeks an end to hostilities and resumption of talks over its nuclear programs.
“Despite a weekend of violence between the two countries, investors showed no signs of panicking, judging by movements in financial markets on Monday,” said Russ Mould, investment director at AJ Bell.
However, he added, “The Middle East conflict remains a fluid situation and there is the potential for markets to still experience sudden jolts if the tension escalates further.”
The rebound on Wall Street also came as traders looked ahead to a meeting of major world leaders at the G7 summit in the Canadian Rockies later this week.
Traders will be looking to the meeting for signs of progress on trade deals ahead of the end of President Donald Trump’s 90-day pause on “reciprocal tariffs” early next month.
The Federal Reserve’s latest monetary policy announcement is also likely to attract attention from traders in the coming days.
While the central bank is widely expected to leave interest rates unchanged, the accompanying statement and Fed officials’ latest projections may provide more clarity about the outlook for rates.
Airline stocks showed a substantial move back to the upside after moving sharply lower over the past few sessions, with the NYSE Arca Airline Index soaring by 3.3 percent.
Significant strength was also visible among semiconductor stocks, as reflected by the 3.0 percent surge by the Philadelphia Semiconductor Index.
Computer hardware, financial and telecom stocks also considerable strength, while pharmaceutical and oil service stocks bucked the uptrend.
Dow Jones, S&P, Nasdaq, Renewed Israel-Iran Concerns May Lead To Pullback On Wall Street
by
Tags: