Traders work on the floor of the New York Stock Exchange on April 1, 2024.
Brendan McDiarmid | Reuters
U.S. stock futures managed to rise on Sunday as investors dealt with several issues, including an Iranian missile and drone strike on Israel and rising stock market volatility that sent the Dow Jones Industrial Average to its worst week of the year last week.
Futures contracts tied to the Dow Jones Industrial Average rose 78 points, or 0.2%. S&P 500 futures rose 0.25%, and Nasdaq-100 futures advanced 0.28%.
Gold futures fell slightly to trade at $2,360 an ounce. The metal hit a record high last week and has risen 15 percent this year as investors search for safety from severe inflation and geopolitical tensions.
The Dow lost 476 points and the S&P 500 had its worst day since January on Friday amid lingering inflation fears and a weak start to the first-quarter earnings reporting season. The losses caused the Dow to fall 2.4% last week for its worst week since March 2023 and its second week in a row. The S&P 500 fell 1.5% in its worst week since October 2023. The Nasdaq Composite Index recorded its third negative week in a row.
Iran launched drones and missiles at Israel on Saturday evening, in the first direct attack on Israel from Iranian territory. While most of the threats have been intercepted, fears of retaliation remain.
Oil prices, which had risen in the past few weeks before the onslaught of rising tensions in the Middle East, fell slightly on Sunday.
“This remains a serious situation, but the risks to oil and markets may be slightly lower than feared on Friday, the eve of the attack,” wrote Krishna Guha, senior managing director at Evercore ISI and head of the central bank’s global policy and strategy team. In a note on Sunday.
Guha added that the main question remaining is how Israeli Prime Minister Benjamin Netanyahu will respond to the attack. Guha noted that the Biden administration has made clear that it does not want Israel to retaliate.
“Provided that Netanyahu appears willing to follow US advice, there could be some elements of recovery in the markets on Monday. However, our colleagues on the energy team do not expect a significant decline in oil prices,” Guha said. .
On the earnings front, investors will be watching the results of Goldman Sachs and M&T Bank on Monday morning. More economic data is also scheduled to be released. Retail sales data is scheduled for release on Monday, as well as business inventories data for February and manufacturing numbers for March.
Treasury yields jumped for most of last week amid a third straight hotter-than-expected CPI reading. However, interest rates fell on Friday as investors bought Treasuries as a safe haven from geopolitical tensions. Prices move inversely with returns.
While JPMorgan Chase beat analysts’ earnings estimates in its first-quarter report on Friday, investors sent shares down 6% on concern about what it might generate from lending next year. CEO Jamie Dimon also raised concerns about the “troubling” global landscape and “ongoing inflationary pressures.”
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