Dow Jones Industrial Average futures fell 137 points ahead of Tuesday’s open as renewed U.S.-Iran fighting pushed oil higher. Tech futures rebounded from Monday’s chip selloff, while investors braced for the June CPI report and Fed testimony.
The Dow Jones Industrial Average was set to open lower on Tuesday, with futures down 137 points, or 0.3%, as investors fretted over a flare-up in tensions between the U.S. and Iran. S&P 500 futures slid 0.1%, but Nasdaq 100 futures climbed 0.4% as traders piled back into chip makers after the previous session’s selloff.
Oil climbs on renewed strikes
The three major indexes dropped in the prior session, dragged down by a selloff in chip stocks and a spike in oil prices. That move followed President Donald Trump’s statement that the U.S. would reinstate its naval blockade of the Strait of Hormuz.
Crude rose again early Tuesday after a third straight night of U.S. strikes on Iran. Brent international futures gained 3.3% to $86.05 a barrel, while West Texas Intermediate U.S. futures added 3.1% to trade at $80.58 a barrel. The rally reignited inflation concerns, pushing the 10-year Treasury yield to 4.623% after an earlier eight-week high.
UBS Global Wealth Management Chief Investment Officer Mark Haefele said the fighting underscored the difficulty of reaching a lasting deal. Still, he expects both sides to avoid all-out war: “we believe both sides remain motivated to avoid a return to all-out war”.
A crunch day for data
Because several events could shift the focus away from Iran, traders were watching the calendar closely. The Bureau of Labor Statistics is set to release the June consumer price index report, which will show what impact the conflict had on inflation last month.
JPMorgan and Goldman Sachs are among the banks reporting as second-quarter earnings season ramps up. Meanwhile, Federal Reserve Chairman Kevin Warsh is set to testify before Congress about monetary policy and the U.S. economy. The Cboe Volatility Index, a gauge of Wall Street nerves, rose 1% to 17.32 as the session approached.
Source: Barron’s
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