Investing.com– US stock index futures edged higher Monday, recovering slightly from last week’s steep losses as fears of an Iran-Israel conflict battered risk sentiment, while the first quarter earnings season kicked off on a dour note.
At 06:55 ET (10:55 GMT), rose 100 points, or 0.3%, rose 23 points, or 0.5%, and rose 105 points, or 0.6%.
Iran-Israel conflict in focus
Concerns over a wider conflict in the Middle East were front and center after Iran launched a mass drone and missile attack on Israel over the weekend, in retaliation for an alleged Israeli strike against an Iranian consulate in Damascus.
While the strike reportedly caused minimal damage, it enhanced the possibility of other countries, including the U.S., being dragged into a broader war.
That said, Israeli ministers reportedly signaled that retaliation will not be immediate, while Iran also declared that its operation had concluded with no plans for further action against Israel.
Wall Street hit by weekly losses amid waning rate cut hopes
The main indices closed sharply lower on Friday, with the dropping almost 500 points, or 1.2%, the falling 1.5%, its worst day since January, and the dropping 1.6%.
The losses resulted in the DJIA shedding 2.4% last week, its worst week since March 2023, the S&P 500 sliding 1.5%, its worst week since October 2023, while the Nasdaq Composite Index dropped 0.5%, its third negative week in a row.
Waning optimism over early U.S. interest rate cuts was the biggest weight on stock markets, as a swathe of sticky inflation data saw investors sharply pare bets on a June interest rate cut.
The main economic release Monday is March , which is expected to show a rise of 0.4% on the month, a slowing in growth from 0.6% the prior month.
Goldman Sachs, Johnson & Johnson earnings on tap
Weak earnings from several major Wall Street banks also weighed, setting a dour tone for the first quarter earnings season.
The earnings season continues this week, with Goldman Sachs (NYSE:), along with Charles Schwab (NYSE:), reporting its first quarter results on Monday.
Johnson & Johnson (NYSE:), UnitedHealth Group (NYSE:), Bank of America (NYSE:) and Morgan Stanley (NYSE:) are set to report their first quarter earnings on Tuesday.
Elsewhere, Apple (NASDAQ:) stock fell over 1% premarket after data from research firm IDC indicated that the iPhone maker has lost its crown as the world’s No.1 phone maker, with Samsung regaining that spot in the wake of Apple’s weak first quarter.
Apple’s smartphone shipments dropped about 10% in the first quarter of 2024, a period when global smartphone shipments increased 7.8% to 289.4 million units.
Tesla (NASDAQ:) stock fell 0.7% premarket following reports that the EV manufacturer may be about to announce large scale redundancies as it grapples with worsening sales.
Crude retreats from recent highs
Crude prices retreated Monday as the limited damage done by Iran’s attack on Israel late on Saturday lessened fears about a wider regional conflict, potentially hitting supply from this oil-rich region.
By 06:55 ET, the U.S. crude futures traded 0.6% lower at $85.11 a barrel, while the Brent contract dropped 0.6% to $89.84 per barrel.
An attack by Iran had been widely expected in retaliation for a suspected Israeli air strike against a top Iranian military commander in Damascus last week, and the crude benchmarks had risen on Friday to their highest levels since October.
“The market had already priced in some form of attack, while limited damage and no loss of life means the potential for a more measured response from Israel. How Israel responds is now the key uncertainty,” said analysts at ING, in a note.
(Ambar Warrick contributed to this article.)
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