US Stocks Halt Rout Even as Iran Tensions Lift Oil: Markets Wrap
(Bloomberg) — US stocks futures staged a rebound even as tensions in the Middle East sent oil prices higher.
S&P 500 contracts rose 0.7% while those for the Nasdaq 100 climbed 1.3%. Brent climbed as much as 5.4% after Israel retaliated against Iranian missile attacks. The advanced eased after the Fars news agency reported that the country’s central military command said the military operation against Israel has ended.
Treasuries fell, with the 10-year yield up one basis point to 4.54% as traders added to bets that the Federal Reserve will hike interest rates. The dollar dropped 0.2%.
Investors are starting the week grappling with a host of negatives: renewed fighting in the Middle East, inflation pressures that are bolstering the case for rate hikes and worries over whether the blistering artificial-intelligence rally has run too far.
A flood of new shares from companies looking to fund their AI ambitions, including SpaceX’s offering that concludes this week, is also raising questions about whether there will be enough buyers to soak them all up.
“There are three key potential risks to stock markets at the moment — Hormuz remaining closed, inflation and rates rising faster than expected and investors taking profits in assets which have performed spectacularly well,” said Michael Bell at RBC Bluebay Asset Management. “Some hedges and diversification against all three risks probably make sense.”
Chipmakers that were the hardest hit in Friday’s selloff attracted dip buyers in premarket trading. Marvell Technology Inc. rose 7.9% while Micron Technology Inc. advanced almost 4.2%. Nvidia Corp. led gains among the Magnificent Seven heavyweights.
Bitcoin climbed 2.8% after falling below the $60,000 mark on Friday for the first time since Donald Trump won reelection in 2024. Strategy Inc. Chairman Michael Saylor hinted at further purchases.
Israel and Iran exchanged missile strikes on Monday despite President Donald Trump’s calls for both sides to stop fighting. The exchange is one of the most serious tests of a ceasefire that took effect on April 8 to halt fighting involving the US, Israel and Iran.
Trump said final negotiations for a peace deal were proceeding and that “things should move quickly.”
CPI Test
As traders get ready for two weeks packed with event risk, they are likely to remain cautious ahead of Wednesday’s release of US inflation data for May. The consumer price index is expected to jump by 4.2% from a year earlier — the highest rate in more than three years.
The European Central Bank is widely seen to raise rates Thursday for the first time since 2023. After that, attention will turn to Kevin Warsh’s first meeting as governor of the Federal Reserve next week. Interest-rate swaps indicated traders expect at least one quarter-point Fed hike by the December policy meeting.
“I’d expect dip buyers to be patient, not quick,” said Hassan Raza, portfolio manager at CG Asset Management. “Nobody wants to be long ahead of a CPI print that confirms energy is bleeding into core.”
Morgan Stanley strategists led by Mike Wilson said the selloff in US stocks was “inevitable and ultimately healthy” if the rally is going to continue into the end of the year.
His optimism was echoed by Citigroup Inc. strategists led by Scott Chronert, who raised their year-end target for the S&P 500 by 9.7% to 8,100 after a “big step up” in earnings expectations.
“Event risks haven’t broken the dip-buying instinct, and that’s unlikely to change this week in the absence of a fresh catalyst,” said Laura Cooper, global investment strategist and head of macro credit at Nuveen. “US growth is tracking firm, and we’re coming off one of the strongest earnings seasons in recent years.”
What Bloomberg Strategists Say…
“The equity market’s two key drivers, AI and energy, have both turned negative, pointing to downside for stocks. While the weakness in tech looks more like a correction than the start of a bear market, investors are heading into two weeks packed with event risk just as oil prices are moving higher again. It is difficult to argue for adding risk in the near term.”
— Skylar Montgomery Koning, macro strategist. For the analysis, click here.
Corporate Highlights:
Nvidia Corp. Chief Executive Officer Jensen Huang called a global tech stocks selloff that began last week a buying opportunity, saying the buildout of artificial intelligence has just begun. Intesa Sanpaolo SpA offered to buy Banca Monte dei Paschi di Siena SpA for €30.6 billion ($35.3 billion) in a move that’s set to spur a new phase of dealmaking in Italian finance. Ingredion Inc. agreed to buy Tate & Lyle Plc for £2.7 billion ($3.6 billion), in a move that marks the end of the UK company’s near-century on the London Stock Exchange. Nvidia and Hyundai Motor Group agreed to deepen their alliance to turn so-called physical AI and robotics into real industrial products. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.7% as of 7:34 a.m. New York time Nasdaq 100 futures rose 1.3% Futures on the Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 was little changed The MSCI World Index fell 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1541 The British pound rose 0.2% to $1.3366 The Japanese yen rose 0.2% to 159.95 per dollar Cryptocurrencies
Bitcoin rose 2.7% to $63,520.01 Ether rose 3.5% to $1,684.7 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.54% Germany’s 10-year yield was little changed at 3.04% Britain’s 10-year yield was little changed at 4.91% Commodities
West Texas Intermediate crude rose 1.8% to $92.14 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling, James Hirai and Subrat Patnaik.
©2026 Bloomberg L.P.
