(Bloomberg) -- U.S. stock-index futures fell after an American airstrike in Iraq killed a top Iranian commander.
S&P 500 Index futures contracts expiring in March were down 1.1% as of 10:19 a.m. in London after the attack that killed Qassem Soleimani, the Iranian general who led the Revolutionary Guards’ Quds force. Dow Jones Industrial Average contracts and those on the Nasdaq 100 also fell.
Oil spiked, with futures in New York and London surging 4% or more, as Iran’s Supreme Leader Ayatollah Ali Khamenei vowed “severe retaliation” after the death of one of his country’s top commanders. Gold also surged. The Stoxx Europe 600 Index dropped 0.7%.
“The ‘severe retaliation’ aspect is possibly what is scaring the markets as it could mean that there will be a counter-attack versus American diplomats,” said Alberto Tocchio, chief investment officer at Colombo Wealth in Lugano, Switzerland. “Markets could use this excuse to take some profits as sentiment and positioning are possibly too high.”
The S&P 500 Index climbed 0.8% to a fresh record in New York on Thursday, boosted by tech shares including Apple and Alphabet. The gain extended the benchmark gauge’s 29% advance for 2019.
In addition to the Middle East situation, investors are keeping an eye on geopolitical tension surrounding North Korea, where Kim Jong Un said he was no longer bound by his pledge to halt major missile tests and would soon debut a “new strategic weapon.”
“We are only into the third day of the new year, and a big fat dollop of geopolitical uncertainty has landed on investors’ desks already,” Jeffrey Halley, a senior market analyst at Oanda in Singapore, wrote in a note. “Readers now know why I am reluctant to look past 1Q of the new year at this stage,” Halley said, adding that the holiday-shortened week shifts the focus to “the real start of the trading year” on Monday.
MARKETS:
- E-Mini futures on S&P down 1.1%
- E-Mini futures on Dow Jones down 0.9%
- E-Mini futures on Nasdaq 1.3% lower
- VIX Index trading 23% higher
- WTI crude futures up 3.7% to $63.43/bbl
- Bloomberg spot dollar index up 0.2%
ECONOMIC DATA:
- 10:00 - Nov. Construction Spending MoM est. 0.4% (prior -0.8%)
- 10:00 - Dec. ISM Manufacturing est. 48.9 (prior 48.1)
- 10:00 - Dec. ISM New Orders (prior 47.2)
- 10:00 - Dec. ISM Prices Paid est. 48.1 (prior 46.7)
- 10:00 - Dec. ISM Employment (prior 46.6)
- 14:00 - Dec 11 FOMC Meeting Minutes
- 15:00 - Dec. Wards Total Vehicle Sales est. 17.00m (prior 17.09m)
EARNINGS:
- Companies reporting earnings include Lamb Weston
©2020 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR