The S&P 500 Index ($SPX) (SPY) today is up +0.59%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.53%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.82%. September E-mini S&P futures (ESU25) are up +0.52%, and September E-mini Nasdaq futures (NQU25) are up +0.71%.Â
Stock index futures today recovered from overnight losses and turned higher. Meanwhile, WTI crude prices erased gains and moved lower after Reuters reported that the Iranian government said it is ready to discuss limitations on its uranium enrichment.
Stocks have support on speculation that the US will give negotiations a chance before deciding to enter the Israel-Iran war, following the White House's announcement on Thursday that President Trump would decide within two weeks on any US involvement in the conflict, and there is still a "substantial chance" of a negotiated settlement.
Stocks also have support from dovish comments today from Fed Governor Waller, who said, "I think we have room to bring interest rates down as early as July, and then we can see kind of see what happens with inflation."
Stock index futures initially moved lower in overnight trade on concerns about escalation of the Israel-Iran war. On Thursday, Bloomberg reported that senior US officials are preparing for a possible strike on Iran.  Trading activity today may be more volatile than usual due to the expiration of approximately $6.5 trillion in June options, futures, and derivatives contracts, an event known as "triple witching."Â
Today's US economic news was negative for stocks after the June Philadelphia Fed business outlook survey was unchanged at -4.0, weaker than expectations of an increase to -1.5.
Stocks still have some negative carryover from Wednesday when Fed Chair Powell warned that tariff-driven economic uncertainty and inflation risk continue to complicate the Fed's chances to ease monetary policy. Also, the FOMC cut its US GDP forecast and raised its inflation forecast for this year.
Hostilities between Israel and Iran entered an eighth day today with no signs of easing. Israel struck more of Iran's nuclear and missile production sites today and warned it could bring down Iran's leadership. Meanwhile, Iran said it won't negotiate with the US while Israel's assault continues.  Iranian President Pezeshkian said the only way to end the imposed war is to "unconditionally stop" the enemy's aggression. Iran showed no signs of backing down and reiterated an intention to respond with force if the US were to get directly involved in Israeli attacks.
So far, there's been no closure of the vital Strait of Hormuz that handles about 20% of the world's daily crude shipments, although navigational signals from over 900 vessels moving through the strait have been disrupted due to "extreme jamming" of signals from the Iranian port of Bandar Abbas, which caused a collision of two tankers Tuesday near the Strait of Hormuz. Â
Investors are bracing for negative tariff news within the next week or so following President Trump's announcement last Wednesday that he intends to send letters to dozens of US trading partners within one to two weeks, setting unilateral tariffs ahead of the July 9 deadline that came with his 90-day pause.Â
The markets are discounting the chances at 15% for a -25 bp rate cut at the July 29-30 FOMC meeting.
Overseas stock markets today are mixed. The Euro Stoxx 50 is up by +1.25%.  China's Shanghai Composite closed down -0.07%.  Japan's Nikkei Stock 225 closed down -0.22%.
Interest Rates
September 10-year T-notes (ZNU25) today are down -4 ticks. The 10-year T-note yield is up +2.6 bp to 4.417%.  T-notes today are under pressure on negative carryover from weakness in European government bonds. Also, rising inflation expectations are bearish for T-notes after the US 10-year breakeven inflation rate rose to a 2-week high today at 2.337%. T-notes recovered from their worst levels on the weaker-than-expected Philadelphia Fed business outlook survey. Also, dovish comments from Fed Governor Waller were bullish for T-notes when he said, "I think we have room to bring interest rates down as early as July." T-notes are still supported by safe-haven demand on concern the US may be on the verge of joining the attack against Iran.
European government bond yields today are higher. The 10-year German bund yield is up +0.6 bp to 2.528%. The 10-year UK gilt yield is up +1.8 bp to 4.548%.
German May PPI fell -1.2% y/y, right on expectations and the biggest decline in 8 months.
UK May retail sales ex-auto fuel fell -2.8% m/m, weaker than expectations of -0.7% m/m and the biggest decline in nearly 1-1/2 years.
Swaps are discounting the chances at 6% for a -25 bp rate cut by the ECB at the July 24 policy meeting.
US Stock Movers
Chip makers are rallying today and are supporting gains in the broader market. Advanced Micro Devices (AMD) is up more than +4% to lead gainers in the Nasdaq 100. Also, ON Semiconductor Corp (ON) and Super Micro Computer (SMCI) are up more than +2%. In addition, Microchip Technology (MCHP), Intel (INTC), and Applied Materials (AMAT) are up more than +1%. Â
Kroger (KR) is up more than +5% to lead gainers in the S&P 500 after reporting Q1 adjusted EPS of $1.49, better than the consensus of $1.45.
CarMax (KMX) is up more than +3% after reporting Q1 net sales of $7.55 billion, stronger than expectations of $7.52 billion.
Fair Isaac Co (FICO) is up more than +3% after its Board of Directors approved a stock repurchase program to acquire up to $1 billion of the company's outstanding common stock.Â
GMS Inc (GMS) is up more than +27% after the Wall Street Journal reported that Home Depot had made an offer for the company, potentially setting off a bidding war with QXO Inc, which made a $5 billion offer for the company earlier this week. Â
Circle Internet Group (CRCL) is up more than +7%, adding to Wednesday's +34% surge after the US Senate passed stablecoin legislation setting up regulatory rules for cryptocurrencies pegged to the dollar.Â
Mondelez International (MDLZ) is up more than +2% after Wells Fargo Securities upgraded the stock to overweight from neutral with a price target of $78.Â
Darden Restaurants (DRI) is up more than 1% after reporting that Q4 comparable same-store sales rose 4.60%, stronger than the consensus of 3.46%.Â
Accenture (ACN) is down more than -7% to lead losers in the S&P 500 after lowering its full-year operating margin forecast to 15.6% from a previous forecast of 15.6%-15.7%.Â
Smith & Wesson Brands (SWBI) is down more than -15% after reporting Q4 adjusted EPS of 20 cents, weaker than the consensus of 23 cents.
Jack in the Box (JACK) is down more than -1% after Stifel downgraded the stock to hold from buy.Â
Earnings Reports (6/20/2025)
Accenture PLC (ACN), CarMax Inc (KMX), Darden Restaurants Inc (DRI), Kroger Co/The (KR).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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