The S&P 500 futures started the week lower, as investors assess the latest escalation in the conflict between the United States and Iran. The exchange of airstrikes over the weekend increased caution in global markets, boosted oil prices, and led traders to reduce exposure to higher-risk assets ahead of Wall Street's opening.
In electronic trading, S&P 500 futures were down 0,32%, at 7.595,75 pontos. Futures contracts for the Dow Jones fell 0,26%, to 52.767 pontos, while Nasdaq 100 futures lost 0,48%, at 29,888 points. The Russell 2000 was also trading lower, down 0,60%, reflecting a broader risk-off movement among investors.
Despite the deterioration in sentiment, the volatility index VIX was trading at 15,03 points, down 5,11%, indicating that the market is still not pricing in a high level of financial stress.
The movement comes after the United States and Iran resumed exchanging airstrikes over the weekend. According to the information, Tehran struck American military installations in Gulf countries and announced the closure of the Strait of Hormuz, one of the most important maritime routes for the global oil trade.
On Sunday, the current president of the United States, Donald Trump, challenged the Iranian statement and said that the passage remained open to commercial traffic. The day before, Trump had authorized attacks against Iranian targets after a commercial ship crossing the strait was targeted in an offensive attributed to Iran.
The tensions triggered a strong reaction in the energy market. The contract for WTI crude oil for August was up 3.43%, trading at US$ 73,86 per barrel. Meanwhile, gold was quoted at US$ 4.091,70, down 0.53%, after posting strong gains during the rise in geopolitical uncertainties.
The cryptocurrency market was also following the cautious movement, although with a more moderate impact. Bitcoin was trading at US$ 63.670,86, down 0.76% over the last 24 hours, following the increased search for assets considered more defensive.
Regarding the impact of the crisis, Ben Emons, founder of Fed Watch Advisors, wrote: “The closure of the Taiwan Strait will continue to influence the market, creating an atmosphere of risk aversion. Even so, unless there is a real prospect of closure in the coming months, which could cause a major global energy shortage… the focus next week will also be on CPI, the Warsh report, and bank earnings.”
In addition to geopolitics, investors are following the start of the second-quarter earnings season. This week, 28 S&P 500 companies will report their earnings, including JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, Wells Fargo, Netflix, Johnson & Johnson, and UnitedHealth.
Analysts project growth above 23% in the profits of S&P 500 companies compared to the same period last year. The market is also monitoring investments in artificial intelligence in the technology sector and awaits the release of the June Consumer Price Index (CPI) on Tuesday, a figure considered relevant for expectations regarding the monetary policy of the Federal Reserve.