Dow futures drop 504 pts as Israel's airstrike on Iran sparks fears of a broader Middle East conflict.
Crude oil prices spike up to 13%, marking their largest intraday jump since 2020 amid supply disruption concerns.
University of Michigan’s consumer sentiment data due at 14:00 GMT may shift the market tone amid volatility.
Futures Slammed as Israel-Iran Conflict Ignites
U.S. stock futures are sharply lower Friday morning following Israeli airstrikes on Iran, escalating geopolitical tensions in the Middle East. As of early trading, Dow futures are down 504 points (-1.17%), S&P 500 futures have dropped 1.25%, and Nasdaq 100 futures are off 1.35%. The market is firmly in risk-off mode, with investors pivoting to safe-haven assets amid fears of broader conflict.
Thursday’s session saw modest gains across the board, with the S&P 500 up 0.4%, the Dow and Nasdaq each rising 0.2%, helped by cooler-than-expected May PPI data (+0.1% vs. +0.2% expected) and retreating bond yields.
However, optimism was tempered by White House tariff uncertainty, as conflicting signals from President Trump and Treasury Secretary Bessent left trade policy direction unclear.
Consumer Sentiment Takes the Stage Amid Chaos
At 14:00 GMT, the University of Michigan will release its preliminary June Consumer Sentiment Index. The prior reading held steady at 52.2 in May, though sentiment is still down 24.5% year-over-year.
After four straight monthly declines, traders will watch closely for signs of stabilization, especially given the divergence between “soft” sentiment indicators and resilient labor market data. A rebound could reinforce consumer strength; further weakness may raise concerns about the forward-looking economic outlook.
Oil Explodes Higher; Gold and Bonds Catch a Bid
Daily Light Crude Oil Futures
Oil prices have surged in response to the airstrikes. WTI crude is up 7% at $72.76, while Brent is higher by 6.8% at $74.04. At one point, crude futures spiked as much as 13%, marking the sharpest intraday gains since 2020. The risk of Iranian retaliation and disruptions to oil supply chains are key concerns driving the spike.
Daily Gold (XAU/USD)
Gold climbed 1.1% to $3,420.24, nearing a two-month high, with August futures up 1.3% to $3,446. U.S. Treasury yields declined approximately 3 basis points across the curve, with investors moving to safe-haven bonds. The U.S. dollar index rose 0.2% as capital shifted away from risk assets.
Technical Outlook: Bulls Threatened at Key Levels
Daily E-mini S&P 500 Index
S&P 500 Index futures reversed from the 6,074.75 swing high and are holding near 5,978.00. The 200-day SMA at 5,904.90 is first key support, followed by 5,756.50. Resistance remains firm at the 6,236.50 February high.
Daily E-mini Nasdaq 100 Index Futures
Nasdaq 100 Index futures dropped from the 22,106.00 recent peak and are testing 21,625.25. Immediate support stands at 20,872.49 (200-day SMA), with a deeper floor near 20,727.00. The critical resistance ceiling is unchanged at 22,656.75.
Daily E-mini Dow Jones Industrial Average
Dow Jones Index futures rejected at 43,200 and have pulled back to 42,477. The 50-day SMA at 41,283.90 offers the first line of defense, while the 200-day SMA at 43,134 continues to cap upward momentum. A decisive move above 43,200 would be needed to retest 45,554 highs.
Flight to Safety Dominates Risk Landscape
Markets are under pressure amid escalating Middle East conflict, with safe-haven flows dominating early action. Today’s consumer sentiment data offers the only major economic catalyst, but geopolitical developments will remain the primary driver. Volatility is expected to stay elevated as traders assess the potential for wider regional escalation and implications for oil, inflation, and Fed policy.
Mr.Hyerczyk is a technical analyst, market researcher, educator and trader. Jim is an expert in the area of patterns, price and time analysis, Forex and stocks.
