U.S. stock futures fell early Monday after the United States struck Iranian rocket launchers on Larak Island in the Strait of Hormuz, renewing fears of a broader Middle East escalation.
Dow Jones Industrial Average futures fell 155 points, or 0.29%. S&P 500 futures slipped 0.36%, while Nasdaq-100 futures declined 0.4%.
Asian markets retreat
South Korea’s benchmark Kospi pared earlier losses but still finished 0.52% lower. Japan’s Nikkei 225 declined 0.57%, Hong Kong’s Hang Seng Index fell 0.71%, and mainland China’s CSI 300 slipped 0.81%. Australia’s S&P/ASX 200 dropped 0.26%.
Wall Street set to close out strong month
Wall Street is on track to complete a month of gains led by technology stocks. The Dow was up 2.1% in August, putting it on pace for a fifth consecutive monthly advance. The S&P 500 and Nasdaq Composite were headed for their first monthly gains since May, rising 3% and 4%, respectively.
Both the S&P 500 and the Dow reached all-time highs earlier in August. Technology stocks led the market higher, with shares linked to artificial intelligence outperforming. The S&P 500 technology sector gained nearly 6% for the month, while Nvidia rose more than 8%. Microsoft and Micron Technology advanced 11% and 13%, respectively.
August remained a turbulent month, however, as inflation concerns pushed Treasury yields to multiyear highs. The Treasury Department attempted to slow the sell-off by saying it would increase debt repurchases, but yields at the long end of the curve remained elevated.
Federal Reserve Chairman Kevin Warsh also expressed concern about inflation on Friday, noting that, “while this summer’s [inflation] readings were better than expected, they do not tell me that underlying trends have meaningfully improved.”
“Although we doubt this was intended to foreshadow September’s tightening given his distaste for signaling, his hawkish discussion makes a 25bp September hike more likely than not. Given his inflation metrics, our baseline calls for another in December,” wrote Barclays economist Jonathan Millar in a note.
Middle East tensions lift oil prices
Escalating tensions in the Middle East contributed to volatile trading during August. On Sunday, U.S. Central Command confirmed to MS NOW that the United States had struck two rocket launchers on Iran’s Larak Island.
Crude oil prices rose in early trading after the attack. U.S. oil gained 2.1% to $85.14 per barrel, while Brent futures climbed 2% to $89.90.
Jobs report due Friday
Investors will receive fresh insight into the health of the U.S. economy this week, with the August jobs report scheduled for Friday morning. Monthly manufacturing and services-sector data are also due.
Source: www.cnbc.com
