OPENING CALL
Even with the latest signs that the Iran war could drag on, stocks were on course to stage a muted recovery Monday.
While Dow contracts were lower, futures tied to the S&P and Nasdaq gained.
"Despite renewed anxiety over rates, equity issuance, and geopolitics, we expect the rally to resume," UBS Global Wealth Management said.
AI spending is likely to remain elevated as absorption of the technology continues, it said, adding that markets were also overstating central banks' willingness to raise policy rates.
Traders are pricing in a 69% chance that the Federal Reserve will raise borrowing costs at least once by the end of the year, according to the CME FedWatch tool. Odds a month ago stood at just 14%.
Brent crude futures were up nearly 5% to trade above $97 a barrel, as strikes between Iran and Israel- -the most serious test of the ceasefire yet-
further clouded an already uncertain outlook for investors, with stock indexes falling globally, tracking Friday's declines.
Losses were particularly severe in South Korea, where trading was briefly halted as the Kospi index tumbled more than 8%, dragged by Samsung Electronics and SK Hynix.
Closer to home, Apple's developer conference kicks off Monday where the tech giant will unveil its latest tools and technologies and investors are counting down to the end of the week when SpaceX is expected to start trading on the Nasdaq and
Stocks to Watch
Broadcom, Micron Technology and Nvidia advanced modestly premarket, suggesting the AI trade could stage a rebound Monday.
Delta Air Lines and United Airlines slid on concerns of higher jet fuel prices.
Devon Energy, Diamondback Energy and Occidental Petroleum shares rose premarket amid a nearly 5% rise in Brent crude futures.
Eli Lilly rose premarket on late-stage weight loss trial success.
Flex climbed premarket after &P Dow Jones Indices said Friday it would join the S&P 500.
Marvell Technology jumped premarket after S&P Dow Jones Indices said Friday it would join the S&P 500 later this month.
Strategy gained, on pace to recover slightly after tumbling 24% last week.
Watch For:
Employment Trends Index for May
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MARKET WRAPS
Forex:
The dollar remained elevated after reaching a two-month high after the attacks in the Middle East.
ING said separately that the dollar should remain supported ahead of the Fed's June 17 policy decision, adding it could potentially rise above 100.250-100.650 resistance levels.
The euro was weaker against the dollar,
increasing pressure on the ECB to sound hawkish in favor of tightening monetary policy on Thursday, ING said.
Sterling fell against the dollar and ING saw it falling below $1.3300 and rise to 0.8680 euros, as the BOE could avoid raising interest rates this year.
The pound also tends to underperform during periods of risk aversion, it added, noting renewed Iran-Israel strikes.
Bonds:
Treasury yields rose with oil prices as the fragile Middle East ceasefire was tested once again.
Goldman Sachs now expects the 10-year Treasury yields to end the year at 4.4% from 4.1% previously.
"Given yields are currently above this level, we expect limited spillover effects into other G10 markets."
Energy:
Oil surged after Israel and Iran exchanged fire, threatening the already fragile ceasefire in the Middle East and dimming hopes for an agreement to reopen the Strait of Hormuz.
Saudi Arabia sharply cut the price of its main oil grade for Asia even as the near-closure of the Strait of Hormuz continues to choke off supplies out of the Persian Gulf and tighten global markets.
Fitch Ratings' base case is for Brent to average $87 a barrel in 2026 on the assumption that the Strait of Hormuz reopens by the end of July.
Fitch expects oil prices to fall with the market reverting quickly to a surplus after the strait reopens with a projected oversupply of about 4 million bpd in 4Q, depending on OPEC policy.
Julius Baer stuck with its cautious view that oil prices would fall after the summer.
Metals:
Gold prices fell as fighting dimmed hopes for a near-term deal in the Middle East, heightening inflation concerns and reinforcing expectations of higher interest rates.
"Following Friday's jobs report and a broader deterioration in risk sentiment that also weighed on equities, bullion closed below its 200-day moving average for the first time since October 2023," Saxo Bank said.
"A combination of resilient economic growth and rising inflation expectations has created a challenging environment for gold, overshadowing the longer-term supportive themes of central bank buying, fiscal concerns, and reserve diversification."
Julius Baer said gold was likely to benefit from continued central-bank buying, which appeared to be the strongest structural force in the precious metal markets.
TODAY'S TOP HEADLINES
Intesa Makes $35 Billion Bid for Monte dei Paschi to Rival BPM's Merger Plan
Intesa Sanpaolo said it launched a 30.66 billion-euro ($35.32 billion) takeover bid for Banca Monte dei Paschi di Siena, shortly after Banco BPM made a rival merger proposal.
The approaches pit Italian lenders Intesa and BPM against each other for control of their domestic rival Monte dei Paschi, which is considered the world's oldest bank still in operation, and continue a wave of dealmaking activity in Italy's banking industry.
Nvidia Strikes AI Infrastructure Deals With South Korean Tech Firms
Nvidia is teaming up with leading South Korean technology companies to build large-scale artificial-intelligence infrastructure in Asia, seeking to solidify its data-center footprint and expand its AI ecosystem.
The string of deals comes as Nvidia Chief Executive Jensen Huang makes his second visit to South Korea, home to the world's top memory-chip makers, in less than a year, following a trip to Taiwan, another chip-manufacturing hub.
Ingredion to Take Over Tate & Lyle in $3.6 Billion Deal
U.S. food-and-beverage ingredients maker Ingredion reached a deal to take over U.K. rival Tate & Lyle for 2.7 billion pounds ($3.6 billion) in cash.
The companies said Monday that their boards reached an agreement under which Ingredion offered 595 pence for each Tate & Lyle share-a 59% premium to the last closing price before takeover talks were disclosed last month.
Campbell's Earnings Are Coming. Investors Want Signs Its Snack Business Is Stabilizing.
The Campbell's Company is scheduled to report fiscal third-quarter results Monday before the market opens. Investors will be watching whether the packaged-food maker can stabilize its struggling snacks business after a disappointing first half of the year that forced management to cut its outlook.
For the quarter ended on May 3, Wall Street analysts polled by FactSet expect Campbell's to report earnings of 48 cents a share-down sharply from 73 cents a year ago-on revenue of roughly $2.38 billion, representing a year-over-year sales decline of 3.8%.
This Oil Giant Has Capped Prices at the Pump-but Just for the French
PARIS-Most oil companies say price caps at gas stations are a terrible way to address the energy shock sparked by the Iran war. There is one major exception: France's TotalEnergies.
The company, based just outside Paris, has capped prices at its 3,300 gas stations across France and pledged to continue doing so for as long as the conflict in the Middle East endures. It is the only Western oil company to limit fuel prices voluntarily.
Saudi Arabia Cuts July Crude Prices for Asia As Demand Slows
Top oil exporter Saudi Arabia sharply cut the price of its main oil grade for Asia as demand slows, even as the near-closure of the Strait of Hormuz continues to choke off supplies out of the Persian Gulf and tighten global markets.
State oil producer Saudi Aramco on Monday set the official selling price for July loadings of its Arab Light crude to Asia-the largest destination for Middle Eastern crude-at $9.50 above the Oman/Dubai regional benchmarks, down from a premium of $15.50 a barrel in June.
China Auto Sales Stayed Weak in May
China's auto market weakened further in May, with rising oil prices denting demand for gasoline-powered cars and helping electric and plug-in hybrid vehicles capture a record share of new car sales.
Retail sales of passenger cars in May fell 22.1% from a year earlier to 1.51 million units, the China Passenger Car Association said Monday. EVs and hybrids accounted for a record high 62.9% of new car sales even as retail sales of new-energy cars fell 7.5% to 950,000 units.
For a Select Few, IPOs Are Winners. Good Luck to Everyone Else.
When it comes to initial public offerings, the first-day pop is the fizz that attracts so much interest. After that, they often fall flat.
That's worth bearing in mind amid the hoopla accompanying this week's SpaceX offering in what is set to be the biggest IPO ever. Hopes are high that it will produce a large first-day return, or "pop."
Inflation Is an 'Economic Thief.' What Will the Fed Do About It?
Inflation is becoming a real problem for consumers, investors and policymakers, and the surge in oil prices is only part of the equation the Federal Reserve must consider for future rate policy.
The odds are overwhelmingly in favor of policymakers keeping the benchmark interest rate at the target range of 3.50% to 3.75% at the conclusion of the June 16-17 policy meeting.
What Xi and Kim Want From Their Summit in North Korea
(MORE TO FOLLOW) Dow Jones Newswires
June 08, 2026 06:04 ET (10:04 GMT)
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