Stock Futures Slip as Middle East Violence Escalates, Oil Prices Surge
U.S. futures point lower amid Israel, Hamas conflict
U.S. stock futures moved lower on Monday as investors assessed the impact of the intensifying conflict between Israel and Hamas. The situation has raised concerns about geopolitical stability and its potential effect on oil prices, adding to worries about inflationary pressures ahead of crucial U.S. consumer price data later this week.
At 04:51 ET (08:51 GMT), the Dow Jones futures had lost 197 points or 0.6%, S&P 500 futures shed 28 points or 0.7%, and Nasdaq futures fell by 107 points or 0.7%.
The Israeli-Palestinian conflict escalated to a full-blown war over the weekend, with Hamas attacking several Israeli towns and resulting in numerous casualties. In response, Israeli air strikes pounded targets in Gaza. This violence, coupled with existing concerns over inflation and interest rates, has left markets in a fragile state.
The Federal Reserve will closely consider the latest consumer price data, which will be released on Thursday. The probability of the central bank keeping interest rates steady at its upcoming policy meeting next month stands at just over 76%, according to sources.
The tensions have also affected market sentiment ahead of the upcoming bank earnings reports, which typically mark the beginning of the quarterly corporate financial results.
Middle East violence boosts U.S. dollar’s safe haven status; shekel slides
The U.S. dollar climbed as traders sought the relative safety of the greenback amid clashes between Israel and Hamas. The Dollar Index, which tracks the currency against a basket of peers, rose by 0.4% to 106.49.
The outbreak of violence led to the shekel slumping to its weakest level against the dollar since 2016. The Bank of Israel announced that it would sell up to $30 billion in foreign currency to stabilize the shekel and moderate volatility in the exchange rate.
Oil prices soar
Oil prices rebounded from last week’s drop as the conflict between Israel and Hamas deepened political uncertainty in the Middle East. At 04:52 ET, Brent crude futures traded 3.0% higher at $85.31 a barrel, while WTI crude climbed 2.8% to $86.95 per barrel.
The violence in the Middle East has raised concerns about potential disruptions to oil supply and geopolitical strategies in the region. The decision by Saudi Arabia and Russia to extend output reductions until the end of 2023 has already strained supply.
Nelson Peltz planning push for Disney board seats – WSJ
Nelson Peltz’s Trian Fund Management is expected to request multiple seats on the board of Walt Disney, according to sources. Trian, which owns around a $2.5 billion stake in the company, will likely ask for one of those seats to be reserved for Peltz.
The entertainment giant’s stock has slumped this year, and Trian may nominate directors to be voted on at the next annual meeting should Disney refuse their request.
Citigroup to sell China wealth management portfolio to HSBC
Citigroup has agreed to sell its retail wealth management portfolio in mainland China to HSBC. The transaction, expected to close in the first half of 2024, covers total deposits and investment assets under management of around $3.6 billion across 11 large Chinese cities.
This move will expand HSBC’s presence in China as it seeks to drive revenues in the world’s second-largest economy.