SPX: S&P 500 Futures Perk Up as Traders Shrug Off Middle East Tremors, Eye Fed Decision

Stocks believed in better days this morning when America’s broad-based benchmark added just about 0.2% to its valuation ahead of the opening bell.

🌱 Stock Futures Tick Higher

• Futures contracts tied to the S&P 500 (SPX) were pointing slightly higher ahead of the opening bell Monday as traders had a couple days to reassess Middle East tensions. The verdict? Not too market-threatening, at least for now.
• Stocks broadly were looking to open higher with futures on the Dow Jones and the Nasdaq Composite also above the flatline. It’s a shortened week so there’s another reason to be optimistic and try to squeeze in some gains — equity trading will be closed on Thursday for Juneteenth.
• But there’s a lot to digest before that. First off, the Iran-Israel standoff wasn’t making an excessive amount of headlines over the weekend, leading the market to believe that maybe the situation isn’t critical to dealmaking. But then again, the focus on the Middle East is razor-sharp and any surprise turn of events could quickly derail market progress.

🌸 Fed Event: Week’s Highlight

• Moving ahead, we’ve got the biggest highlight for the Fed watchers out there. It’s Fed week and Jay Powell and his clique of central bankers will be calling interest rates. Priced in? A hold.
• Too boring, as it may sound, but it’s not the expectation that will be the thunder. Rather, it’s the guidance from the Fed boss himself. The man who moves markets with a simple “Good afternoon” may decide to drop some hints on future rate moves, including a possible rate cut. Why so? It’s the inflation’s downward trajectory.
• Consumer prices in the US surprised to the downside last month with the print showing a growth pace of 2.4% in May. Even though it was above April’s 2.3% reading, it undershot Wall Street’s consensus views of 2.5%. And, what’s more impressive, it was the first full month of tariff hikes and pullbacks.

🌊 Zoom Out for Bigger Picture

• Quick catch up: stocks on Friday notched one of their worst days of the month. The Dow went down by nearly 800 points, or 1.8%, followed by the Nasdaq Composite, which erased 1.3%. The S&P 500 was the most composed, with a 1.1% decline on the day.
• Zoom out and you see it’s been a tough stretch so far this year. One rough patch after another, stocks are struggling to stay afloat with the broad-based index up a mere 1.9%. Last year’s first half, in comparison, saw the equity gauge rise by 15%.
• But, as you’ve read in more places than you can count — past performance isn’t an indication of future results. So buckle up and let’s see what the week brings.