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– Futures contracts: Dow Jones down 0.04%, S&P 500 down 0.08%, Nasdaq down 0.09% – Oil prices surge 3% due to tensions with Iran – Intel rises after Friday’s rebound (Latest news before market opening) by Ragini Mathur and Utkarsh Hathi
Major Wall Street indexes were set to open lower on Monday, marking a pause after last week’s record rebound. Concerns about the deadlock in negotiations between the United States and Iran raised oil prices and tempered risk appetite.
President Donald Trump’s swift rejection of Iran’s response to a U.S. peace proposal has heightened fears that the 10-week conflict could drag on and continue to disrupt maritime traffic in the Strait of Hormuz. This has pushed oil prices up by almost 3%.
“Most financial results are now behind us, we need to refocus on restoring oil flow in the strait and lowering energy prices, which simply isn’t the case today,” said Art Hogan, chief market strategist at B Riley Wealth.
U.S. stocks reached new highs last week, with the S&P 500 and Nasdaq both closing at record levels on Friday, supported by optimistic corporate results, a strong monthly employment report, and hopes for a speedy resolution to the Middle East conflict.
At 8:37 a.m. (Eastern Time), E-mini futures contracts on the Dow were down 20 points, or 0.04%, S&P 500 futures down 5.75 points, or 0.08%, and Nasdaq 100 futures down 27.75 points, or 0.09%.
Investors will now focus on Tuesday’s Consumer Price Index data, which is expected to show a slight inflation increase in April, as the Middle East conflict continues to exert upward pressure on energy prices.
Despite being a net oil exporter, concerns persist about the war’s impact on consumer and business demand. Monthly production and retail sales figures are also expected later in the week.
A meeting between Trump and Chinese President Xi Jinping is also expected later this week, where the two leaders are likely to discuss Iran, Taiwan, artificial intelligence, nuclear weapons, and the extension of a critical minerals agreement.
The first quarter earnings season is coming to a close, with better-than-expected performance from companies, particularly in the technology sector, which helped propel stocks to new highs.
Big names expected to release their earnings this week include tech networking giant Cisco, semiconductor equipment manufacturer Applied Materials, and heavyweight companies Nvidia and Walmart later in the month.
On Monday, Mosaic dropped 6.4% in pre-market trading after the fertilizer manufacturer withdrew its annual phosphate production forecasts.
Media giant Fox Corp surged 5.6% after exceeding Wall Street estimates for third-quarter revenue.
Intel rose 4.3% after jumping 14% on Friday following reports of a preliminary chip manufacturing agreement with Apple.
Among other moving stocks, some airline company stocks declined as rising oil prices threatened to squeeze their margins. Southwest Airlines, Delta Air Lines, Alaska Air, and United Airlines saw declines ranging from 1% to 1.5%.
