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U.S. Index Futures Decline Amid Israel-Iran Tensions

Fernanda T
Latest News
April 19 2024 7:32AM

In pre-market trading this Thursday, U.S. index futures are down, reflecting increased tensions between Israel and Iran. S&P 500 is headed for its worst week in nearly six months, after five consecutive sessions of decline and a weekly accumulated decline of 2.2%. This would be the third consecutive week of losses for the index, largely due to reduced expectations of a short-term interest rate cut.

At 6:36 AM, Dow Jones futures (DOWI:DJI) fell 129 points, or 0.34%. S&P 500 futures were down 0.42%, and Nasdaq-100 futures lost 0.66%. The yield on 10-year Treasury notes was at 4.569%.

In the commodities market, West Texas Intermediate crude oil for June fell 0.63% to $86.56 per barrel. Brent crude oil for June was down 0.61%, near $86.58 per barrel. Iron ore traded on the Dalian exchange fell 0.34% to $120.28 per metric ton.

European markets are seeing a sharp decline this week, marked by increased tensions in the Middle East and a reassessment of expectations for future monetary policies. Geopolitical tension and statements during the Spring Meetings of the International Monetary Fund have kept investors on alert. Notably, Fran├žois Villeroy de Galhau, a voting member of the European Central Bank, expressed in an interview with CNBC that the bank should consider a rate cut as early as June. According to him, this measure would be crucial to prevent a delay in responding to inflation, reflecting the necessary caution in a period of economic and political uncertainties.

Asian markets ended Friday with significant declines, in response to Israel’s limited attack on Iran. Among the main indices, the Taiwan Index registered the sharpest drop, plummeting 3.81% to 19,527.12 points, the lowest level in over a month. Japan’s Nikkei also suffered considerable losses, retreating 2.66%. Other markets, including the Shanghai SE in China, which fell 0.29%, the Hang Seng in Hong Kong, with a reduction of 0.99%, the Kospi in South Korea, which decreased 1.63%, and the ASX 200 in Australia, which retreated 0.98%, also reflected the increasing geopolitical tension and the impact on investor sentiment.

On Thursday, U.S. stock markets had a volatile day. Despite a positive start, the S&P 500 and Nasdaq closed down for the fifth consecutive day, while the Dow Jones managed a small gain. The Dow rose 22.07 points, closing at 37,775.38, an increase of 0.06%. The S&P 500 fell 11.09 points, ending at 5,011.12, a decline of 0.22%. The Nasdaq retreated 81.87 points, closing at 15,601.50, a decrease of 0.52%. The Federal Reserve of Philadelphia’s manufacturing activity index jumped from 3.2 in March to 15.5 in April. Unemployment claims remained stable at 212,000. Existing home sales fell 4.3%, to an annual rate of 4.19 million.

In terms of quarterly earnings, scheduled to report on Friday are American Express (NYSE:AXP), P&G (NYSE:PG), Schlumberger (NYSE:SLB), Wipro (NYSE:WIT), Fifth Third Bank (NASDAQ:FITB), Huntington Bancshares (NASDAQ:HBAN), Regions (NYSE:RF), Lakeland Bank (NASDAQ:LBAI), among others.