“Ah, here we go again,” investors, probably, as war tremors rose over the weekend, knocking down risk appetite.
🌍 Markets Wake Up to New Tensions
- Risk appetite took a hit early Monday after another weekend of military escalation between the US and Iran.
- Dow futures slipped 0.5%, S&P 500 futures lost 0.7%, and Nasdaq futures tumbled 1.5% as traders hit the sell button.
- Tehran said it had targeted US facilities across several Gulf countries and declared the Strait of Hormuz closed.
- President Donald Trump pushed back on Sunday, saying the shipping route remained open to commercial traffic.
🛢️ Oil Up, Asia Heads South
- Crude prices climbed as a result. And fast. Brent crude jumped about 4% toward $79 a barrel, while West Texas Intermediate (WTI) gained more than 3% to around $74. Higher oil prices often reignite inflation fears by raising energy costs across the economy.
- Asian markets couldn't hold early gains. South Korea's Kospi plunged more than 9%, sinking below 7,000 to its lowest level since early May. The Kosdaq lost 2%, while Japan's Nikkei 225 slid 1.7%.
- The selling reflected a classic risk-off move. Investors rotating away from assets seen as riskier, such as equities, when geopolitical uncertainty rises.
📊 Big Things Comin’
- Even with geopolitics dominating the headlines, earnings season is about to shift the spotlight. JPMorgan, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo are all scheduled to report this week, alongside Netflix, Johnson & Johnson and UnitedHealth.
- Expectations remain ambitious. Analysts project second-quarter of more than 25% year over year, setting a high bar for corporate America to clear.
- Tuesday brings another major catalyst: the June consumer price index (CPI) report. Inflation data could reshape expectations for the Federal Reserve just as investors are trying to digest another US-Iran curveball.