Dow futures rebound from worst week of 2024 even as traders brace for Israel response to

Traders work on the floor of the New York Stock Exchange on April 1, 2024.

Brendan Mcdermid | Reuters

U.S. stock futures managed to tick higher Sunday as investors dealt with a multitude of issues, including Iran’s missile and drone strike on Israel and a spike in equity market volatility that sent the Dow Jones Industrial average to its worst week of the year last week.

Futures tied to the Dow Jones Industrial Average rose 90 points, or 0.2%. S&P 500 futures added 0.2% and Nasdaq-100 futures advanced 0.3%.

Gold futures pulled back slightly at $2,373 an ounce. Bullion hit a record level last week and is up 15% this year as investors seek safety from sticky inflation and geopolitical tensions.

The Dow lost 476 points and the S&P 500 posted its worst day since January on Friday on lingering inflation concerns and a poor start to the first-quarter earnings reporting season. The losses caused the Dow to shed 2.4% last week for its worst week since March 2023 and its second down week in a row. The S&P 500 slid 1.5% for its worst week since October 2023. The Nasdaq Composite Index posted its third negative week in a row. 

Iran launched drones and missiles on Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While the majority of the threats were intercepted, concerns of retaliation remain. 

Oil prices, which have risen in the last few weeks prior to the attack on the rising Middle East tensions, were slightly lower Sunday.

“This remains a dangerous situation, but risks to oil and markets may be a bit less than feared Friday on the eve of the attack,” Krishna Guha, Evercore ISI senior managing director and head of the Global Policy and Central Bank Strategy Team, wrote in a Sunday note. 

Guha added that the a key question remaining is how Israel Prime Minister Benjamin Netanyahu will respond to the attack. The Biden administration has made it clear it does not want Israel to retaliate, noted Guha. 

“Provided that Netanyahu looks like he is willing to follow U.S. advice, there may be some element of a relief rally in markets Monday. However, our colleagues in the energy team do not expect a big retracement in the price of oil,” said Guha. 

On the earnings front, investors will be watching for Goldman Sachs and M&T Bank results Monday morning. More economic data is also scheduled for release. Retail sales data is scheduled for Monday, as well as business inventories data for February and manufacturing numbers for March. 

Treasury yields were jumping for most of last week amid a third-straight hotter-than-expected CPI reading. However, rates eased on Friday as investors bought Treasuries as a safe haven from the geopolitical tensions. Prices move inversely to yields.

While JPMorgan Chase bested analysts’ profit estimates in its first-quarter report Friday, investors sent the shares 6% lower on concern about what it may generate from lending in the year ahead. CEO Jamie Dimon also raised concerns about the “unsettling” global landscape and “persistent inflationary pressures.”