On Sunday night, stock futures edged down a bit as traders reflected on recent developments in the Middle East and prepared for a wave of corporate earnings due this week.
Dow Jones Industrial Average futures decreased by 135 points, or 0.3%. Similarly, S&P 500 futures also fell by 0.3%, while Nasdaq 100 futures dropped by 0.5%.
This comes after renewed military tensions, with Iran targeting American assets in the Gulf and asserting that the Strait of Hormuz was shut. However, President Trump countered this statement on Sunday, indicating that the crucial waterway remains open for commercial use.
In response to recent actions, Trump ordered airstrikes on Iran following an attack on a commercial vessel in the strait.
Amid rising geopolitical tensions, oil prices saw an uptick. Brent futures climbed 3.7% to reach $78.86 per barrel, and West Texas Intermediate futures jumped over 3% to $74.05.
Ben Emmons, founder of Federal Watch Advisors, commented that the possible closure of the Strait would likely create a cautious market atmosphere. Still, he noted, unless serious supply disruptions are expected to significantly impact global energy availability, attention next week will remain on CPI data, global conflicts, and bank earnings.
This week, 28 companies within the S&P 500 are set to announce their earnings, including major banks like JPMorgan Chase, Goldman Sachs, and Bank of America, as well as other firms like Netflix and Johnson & Johnson.
Analysts’ expectations are optimistic, predicting over a 23% rise in profits for S&P 500 companies in the second quarter compared to last year, as per FactSet.
One area of particular interest is technology, according to Larry Adam from Raymond James. There’s a focus on whether AI will keep driving revenue growth in the sector.
Adam mentioned that although there are some worries about potential cutbacks in AI-related capital expenditures, they have reaffirmed their capex plans and expect growth through 2028. He pointed out, supported by solid evidence, that AI adoption is benefiting businesses across all sectors, with mentions of AI surging 98% year over year.
Additionally, the CPI report for June is expected to be released on Tuesday morning.
