The Dow futures are trading with losses of around 200 points, while the S&P 500 and Nasdaq futures are down 40 and 300 points respectively.
Indices had ended higher on Thursday before the market holiday with chip stocks continuing their rebound from the sell-off seen earlier in the week. Both the S&P 500 and Nasdaq gained between 1% to 2%, although the Dow cooled off from the highs but ended above the flat line.
US-Iran Talks In Switzerland
Markets have to react to multiple developments from over the weekend, which include the reported shutting down of the Strait of Hormuz yet again amidst the Israeli attacks on Lebanon, which has been one of the key flashpoints in talks between the US and Iran.
Amidst all this, the two nations met in Switzerland to begin talks on how to implement the MoU, which was signed by US President Donald Trump last week on the sidelines of the G7 summit in France.
Even as talks were ongoing, Trump threatened Iran once again with more attacks, once in a post on Truth Social, and the other on a call with Fox News, where he said that if Iran does not make a deal, they will have no country left, and the US may even takeover the Strait of Hormuz if need be.
Trump’s threats led to Iran lodging a formal protest, according to the state television.
Are Ships Passing Through The Strait of Hormuz?
Before the reported shutdown over the weekend, as many as 25 tankers managed to transit the Strait, including cargo vessels and oil tankers, according to data from Kpler.
However, that is still lower than the pre-war traffic of over 100 vessels, although it was the highest since June 2.
The Week Ahead For Wall Street
One of the three important things that Wall Street will be monitoring aside of the US-Iran talks, will be the PCE Inflation report, which will be reported on Thursday.
The Personal Consumption Expenditures inflation is important as it is the official metric used by the US Federal Reserve in setting monetary policy and interest rates.
This data report, however, comes after the Fed policy last week, where a hawkish tone from new Chair Kevin Warsh led to a sell-off in the equity markets, although the subsequent signing of the MoU meant that all those losses were recovered.
The other two important factors will be results from FedEx, one of the biggest logistical services provider in the country and from Micron, the chip outperformer, whose shares are up nearly 200% so far in the first half of the year.
