The Day Ahead: Markets Eye Iran Fallout and Fed Speeches Today

Market Overview

U.S. equity futures moved higher shortly after the opening on Monday as traders monitor oil prices and Iran’s potential response following weekend U.S. strikes on three Iranian nuclear sites at Fordo, Isfahan and Natanz.

The surprise Saturday offensive came after President Trump indicated Friday he would decide “within the next two weeks” on military action.

Oil markets showed heightened volatility with WTI crude rising 1.5% to $74.91 per barrel and Brent up 1.4% to $78.08, though both pulled back from overnight highs when Brent briefly cracked $81. The S&P 500 posted its second consecutive weekly decline, losing 0.15% but remains just 3% from record levels.

Key Economic Releases

• 13:45 GMT – S&P Global Flash Manufacturing PMI (June) – Consensus: 52.0 vs Previous: 51.1
• 13:45 GMT – S&P Global Flash Services PMI (June) – Consensus: 53.7 vs Previous: 52.9
• 14:00 GMT – Existing Home Sales (May) – Consensus: 4.00M vs Previous: 3.96M

Flash Manufacturing PMI improvement to 52.0 could signal expansion momentum, while Services PMI uptick may influence Fed rate expectations. Existing Home Sales growth to 4.00M would indicate housing resilience despite elevated mortgage rates.

Central Bank Activity

• 14:00 GMT – Fed Gov. Bowman Speaks
• 17:10 GMT – Chicago Fed Pres. Goolsbee Speaks
• 18:30 GMT – Fed Gov. Kugler & NY Fed Pres. Williams Speak

A heavy day of Fed commentary could realign expectations, especially following Friday’s policy report noting persistent inflation and a strong labor market.

Geopolitical Flash Points

Iran’s parliament has backed closing the Strait of Hormuz, though final decisions rest with the national security council. Secretary of State Marco Rubio warned such action would be “economic suicide” for Iran and “massive escalation” meriting broad international response.

Iran produced 3.3 million bpd in May with 1.84 million bpd exported mostly to China. About 20 million barrels per day (20% of global consumption) flows through the strait.

Iran’s Revolutionary Guard warned U.S. regional bases represent “greatest vulnerability” while pro-Tehran militias in Iraq threaten Washington. Saudi Arabia expressed “deep concern” over U.S. targeting of Iranian nuclear facilities but has limited involvement in the conflict.

Technical Support Levels in Focus

S&P 500 Index futures trade at 6,015.50, finding support near the 200-day SMA at 5,962.40. Key resistance stands at 6,127.00, while deeper support lies at 5,815.5 (50-day SMA) and 5,808.75.

Nasdaq 100 Index futures at 21,838.75 face resistance at 22,322.50 and ultimate ceiling at 22,873.25. Critical support rests at 21,132.02 (200-day SMA) and 20,811.0 (50-day SMA).

Dow Jones Index futures at 42,463 test key resistance at 43,516. Support levels emerge at 41,897.7 (50-day SMA) and deeper at 40,431.

VIX trades at 20.61, below the 50-day SMA (22.9) but above the 200-day (19.73), reflecting modest stress elevation from geopolitical tensions.

Commodities & Crypto Watch

Oil markets surge with WTI climbing $1.07 (+1.5%) to $74.91 and Brent up $1.07 (+1.4%) to $78.08, both well off overnight peaks when Brent jumped over 5% to crack $81 before easing. Worst-case scenario remains Strait of Hormuz closure, disrupting 20 million bpd (20% of global consumption). Iran produced 3.3M bpd in May, exporting 1.84M bpd mostly to China. U.S. dropped 30,000-pound bunker-buster bombs on Iran’s Fordow nuclear site mountain.

Gold trades mixed as Iran-Israel tensions lift safe-haven demand, though gains limited by stronger dollar (+0.6%). “Continued geopolitical uncertainties will likely underpin prices,” says Saxo Bank’s Ole Hansen, though “prospect of Fed rate cut delay amid higher energy prices” calls for patience.

Bitcoin volatile, dipping to $98,240 before recovering to $101,352 in choppy 3-day trade.

Daily Outlook

Markets brace for Iran’s retaliation while monitoring key escalation risks including potential targeting of U.S. personnel or closure of the Strait of Hormuz, which could push oil above $100 per barrel.

Traders will parse Fed commentary and PMI data for policy clues amid “extreme asymmetry” in Middle East conflict capabilities.

Despite geopolitical headwinds and Trump’s trade policy reshaping, the U.S. economy continues demonstrating resilience as seen through previous crises including Ukraine invasion and aggressive Fed tightening cycles.

More Information in our Economic Calendar.