U.S. Stocks May Give Back Ground On Rising Middle East Tensions

(RTTNews) - Following the rally seen over the course of the previous session, stocks may give back some ground in early trading on Friday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 225 points.

Rising geopolitical tensions may lead to a pullback on Wall Street following news a U.S. airstrike killed Iranian military leader Qassem Soleimani.

The U.S. Department of Defense said in a statement that it had killed the head of the Islamic Revolutionary Guard's elite Quds Forces in an airstrike on the Baghdad International Airport in Iraq.

The Pentagon claims Soleimani was behind the recent attacks on the U.S. embassy in Baghdad and said the "strike was aimed at deterring future Iranian attack plans."

Iranian leader Ayatollah Ali Khamenei said there would be "revenge" for Soleimani's death, while President Donald Trump cryptically tweeted, "Iran never won a war, but never lost a negotiation!"

The news has contributed to a spike in crude oil prices, which may weigh on oil-sensitive stocks such as airlines and other transportation companies.

Shortly after the start of trading, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of December.

The ISM's purchasing managers index is expected to inch up to 49.0 in December after slipping to 48.1 in November, although a reading below 50 would still indicate a contraction in manufacturing activity.

The Commerce Department is also due to release its report on construction spending in the month of November. Construction spending is expected to rise by 0.3 percent in November after falling by 0.8 percent in October.

Later in the trading day, the Federal Reserve is scheduled to release the minutes of its latest monetary policy meeting. The Fed left interest rates unchanged at the December meeting after three straight rate cuts.

Stocks moved sharply higher over the course of the first trading session of 2020 on Thursday, extending the substantial upward move seen last year. With the continued advance, the major averages reached new record closing highs.

The major averages saw further upside going into the close, ending the day just off their highs of the session. The Dow surged up 330.36 points or 1.2 percent to 28,868.80, the Nasdaq spiked 119.58 points or 1.3 percent to 9,092.19 and the S&P 500 jumped 27.07 points or 0.8 percent to 3,257.85.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Hong Kong's Hang Seng Index fell by 0.3 percent, while Australia's S&P/ASX 200 Index climbed by 0.6 percent.

Meanwhile, the major European markets have all moved to the downside on the day. While the German DAX Index has tumbled by 1.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both down by 0.2 percent.

In commodities trading, crude oil futures are soaring $2.12 to $63.30 a barrel after rising $0.12 to $61.18 a barrel on Thursday. Meanwhile, after climbing $5 to $1,528.10 an ounce in the previous session, gold futures are jumping $16.40 to $1,544.50 an ounce.

On the currency front, the U.S. dollar is trading at 108.11 yen versus the 108.57 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1146 compared to yesterday's $1.1172.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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