June S&P 500 E-Mini futures (ESM25) are down -1.18%, and June Nasdaq 100 E-Mini futures (NQM25) are down -1.46% this morning, pointing to a sharply lower open on Wall Street as sentiment took a hit following Israel’s attack on Iran’s nuclear and military facilities.
Israel carried out a broad attack on Iran’s nuclear facilities, ballistic-missile sites, and military leadership on Friday. Israel reportedly killed the head of the Islamic Revolutionary Guard Corps and hit dozens of targets in a major escalation that could ignite a wider conflict in the Middle East. The strikes came after Iran announced Thursday that it would soon open a third uranium-enrichment site. The United States said it played no role in the operation.
The attack unsettled markets and drove investors toward safe-haven assets. Israeli Prime Minister Benjamin Netanyahu confirmed that a military operation against Iran had started and would continue “as many days as it takes.” Iran pledged to retaliate against Israel and potentially U.S. assets in the Middle East. At the same time, U.S. President Donald Trump urged Iran to strike a deal “before it is too late.”
In yesterday’s trading session, Wall Street’s three main equity benchmarks ended in the green. Oracle (ORCL) jumped over +13% and was the top percentage gainer on the S&P 500 after the IT giant posted better-than-expected FQ4 results and said it expects its cloud infrastructure growth rate to surge to more than 70% in FY26. Also, Datadog (DDOG) rose more than +3% and was the top percentage gainer on the Nasdaq 100 after Wolfe Research upgraded the stock to Outperform from Peer Perform with a $150 price target. In addition, Cardinal Health (CAH) gained over +4% after the medical distributor raised its full-year adjusted EPS guidance. On the bearish side, Boeing (BA) slid more than -4% and was the top percentage loser on the S&P 500 and Dow after an Air India-operated Boeing 787 Dreamliner carrying more than 200 people crashed near the airport in Ahmedabad, a city in western India.
Economic data released on Thursday showed that the U.S. producer price index for final demand came in at +0.1% m/m and +2.6% y/y in May, compared to expectations of +0.2% m/m and +2.6% y/y. Also, the core PPI, which excludes volatile food and energy costs, arrived at +0.1% m/m and +3.0% y/y in May, better than expectations of +0.3% m/m and +3.1% y/y. In addition, the number of Americans filing for initial jobless claims remained at an 8-month high of 248K last week, compared with the 242K expected.
“For the second day in a row, inflation data came in lower than expected, and this gives the Fed room to sit on their hands,” said Chris Zaccarelli at Northlight Asset Management. “As long as inflation isn’t increasing – or even better, is decreasing – the Fed can be patient and wait for more information on how the new tariffs and trade negotiations are going to impact the price stability part of their dual mandate later this year.”
Meanwhile, U.S. rate futures have priced in a 97.2% chance of no rate change at next week’s FOMC meeting.
Today, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. Economists, on average, forecast that the preliminary June figure will stand at 53.5, compared to 52.2 in May.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.340%, down -0.37%.
The Euro Stoxx 50 Index is down -1.49% this morning as Israel’s strikes on Iran weighed on risk sentiment, driving investors toward safe-haven assets. Travel stocks led the declines on Friday as many carriers halted flights over Israeli, Iranian, Iraqi, and Jordanian airspace. At the same time, energy and defense stocks outperformed amid heightened security threats and a spike in oil prices. The benchmark index is on track for a weekly decline. Escalating tensions in the Middle East added to caution in global financial markets as they contend with the effects of U.S. President Donald Trump’s tariff policy. The German economy ministry cautioned in its monthly report on Friday that uncertainty surrounding U.S. trade policy remains high and could jeopardize economic recovery. Meanwhile, investors also digested a slew of economic data from the region. Final data from the Federal Statistical Office confirmed on Friday that Germany’s annual inflation rate was 2.1% in May, unchanged from April. Also, final data showed that France’s annual inflation eased to 0.7% in May, as expected, while Spain’s annual inflation cooled to 2.0%, slightly above the preliminary estimate of 1.9%. In addition, data showed that Europe’s exports plunged in April as demand was pressured by U.S. President Trump’s tariff hikes, resulting in a drop in factory output that signals economic growth has lost momentum after a strong start to the year.
Germany’s CPI, France’s CPI, Spain’s CPI, Eurozone’s Industrial Production, and Eurozone’s Trade Balance data were released today.
The German May CPI came in at +0.1% m/m and +2.1% y/y, in line with expectations.
The French May CPI arrived at -0.1% m/m and +0.7% y/y, in line with expectations.
The Spanish May CPI stood at +0.1% m/m and +2.0% y/y, stronger than expectations of no change m/m and +1.9% y/y.
Eurozone April Industrial Production arrived at -2.4% m/m and +0.8% y/y, weaker than expectations of -1.6% m/m and +1.4% y/y.
Eurozone April Trade Balance came in at 9.9B euros, weaker than expectations of 18.2B euros.
Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.75%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.89%.
China’s Shanghai Composite Index ended lower today, tracking losses across regional markets, as investors flocked to safe-haven assets following Israeli strikes on Iran that heightened tensions in the Middle East. Israel said it struck Iran’s nuclear facilities, ballistic missile factories, and military commanders on Friday, marking the beginning of what it warned would be a prolonged campaign to stop Tehran from developing an atomic weapon. Still, the risk-off sentiment boosted gold and mining stocks amid safe-haven demand. Energy stocks also advanced as oil prices surged. Meanwhile, the benchmark index ended the week lower, despite the U.S. and China agreeing on a framework to ease trade tensions earlier in the week. Analysts said that China’s macroeconomic outlook remains weak, and without a strong policy push, domestic equities lack a catalyst to move higher. In other news, the Financial Times reported on Friday that China’s market regulator had delayed approval of a proposed $35 billion merger between software firms Synopsys and Ansys after U.S. President Trump tightened chip export restrictions on China. In corporate news, Chow Tai Fook Jewellery Group rose over +5% in Hong Kong after the company reported better-than-expected annual net income.
Japan’s Nikkei 225 Stock Index closed lower today as sentiment was dampened after Israel launched a wide-ranging attack on Iran’s nuclear facilities. Chip stocks led the declines on Friday. Export-oriented stocks also slumped as the yen strengthened on haven demand after Israel’s attack against Iran. At the same time, energy stocks outperformed as oil prices jumped. Despite Friday’s drop, the benchmark index posted gains for the week. Data released on Friday showed that Japan’s monthly industrial production was revised downward in April. Meanwhile, Bloomberg reported that Bank of Japan officials now see prices increasing slightly more than they had anticipated earlier in the year, a factor that could pave the way for discussions on raising interest rates if global trade tensions subside. In other news, Japan’s chief tariff negotiator, Ryosei Akazawa, said on Friday that the country will stick firmly to its demand for a review of U.S. tariffs and would not accept any partial agreement. Akazawa is headed for a sixth round of tariff negotiations with U.S. counterparts for the final talks before Prime Minister Shigeru Ishiba and U.S. President Donald Trump meet in Canada on the sidelines of the Group of Seven summit. Separately, Japanese Finance Minister Katsunobu Kato said on Friday that he had not specifically discussed Japan’s $1 trillion-plus holdings of U.S. Treasury securities during previous meetings with U.S. Treasury Secretary Scott Bessent. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +16.67% to 27.44.
The Japanese April Industrial Production arrived at -1.1% m/m, stronger than expectations of -1.2% m/m.
Pre-Market U.S. Stock Movers
The Magnificent Seven stocks are moving lower in pre-market trading amid risk-off sentiment, with Tesla (TSLA) and Amazon.com (AMZN) falling over -2%.
Energy stocks and energy service providers are climbing in pre-market trading, with the price of WTI crude up more than +7% after Israel’s strike on Iran fueled fears of supply disruptions. Exxon Mobil (XOM), Devon Energy (DVN), Occidental Petroleum (OXY), and Schlumberger (SLB) are up more than +3%.
Defense stocks rose in pre-market trading amid escalating tensions in the Middle East, with Lockheed Martin (LMT) and Northrop Grumman (NOC) climbing more than +4%.
Airline stocks slid in pre-market trading as the jump in oil prices sparked concerns about rising fuel costs. Delta Air Lines (DAL) and United Airlines (UAL) are down over -4%.
RH (RH) soared over +18% in pre-market trading after the luxury furniture company maintained its full-year guidance.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Friday - June 13th
OFS Credit (OCCI), Anixa Biosciences (ANIX), Podcastone (PODC).
