June S&P 500 E-Mini futures (ESM25) are up +0.40%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.45% this morning, signaling a partial rebound from Friday’s sell-off on Wall Street as investors dialed back some risk-off positioning sparked by the hostilities between Israel and Iran.

Investors continued to keep a close eye on tensions between Israel and Iran, which showed no signs of easing. Iranian missiles hit Israel’s Tel Aviv and the port city of Haifa before dawn on Monday, marking the latest in a series of tit-for-tat attacks that began last week. Iran also warned that it may close the Strait of Hormuz, a key chokepoint for global oil shipments. Still, investors stepped in to buy the dip on Monday, expecting the conflict would be unlikely to draw in more parties.

This week, investors look ahead to the Federal Reserve’s interest rate decision as well as a fresh batch of U.S. economic data, with a particular focus on the retail sales report.

In Friday’s trading session, Wall Street’s major equity averages closed lower. Most of the Magnificent Seven stocks retreated amid risk-off sentiment, with Nvidia (NVDA) falling over -2% and Apple (AAPL) dropping more than -1%. Also, airline stocks lost ground as the jump in oil prices sparked concerns about rising fuel costs, with American Airlines Group (AAL) and United Airlines Holdings (UAL) sliding over -4%. In addition, Visa (V) and Mastercard (MA) slumped more than -4% after the Wall Street Journal reported that major retailers, including Amazon and Walmart, are exploring ways to use or issue stablecoins to bypass credit card fees. On the bullish side, RH (RH) climbed over +6% after the luxury furniture company maintained its full-year guidance.

Economic data released on Friday showed that the preliminary University of Michigan’s U.S. consumer sentiment index rose to 60.5 in June, stronger than expectations of 53.5. Also, the University of Michigan’s U.S. June year-ahead inflation expectations fell to 5.1% from 6.6% in May, better than expectations of 6.4%, while 5-year implied inflation expectations edged down to 4.1% from 4.2% in May, in line with expectations.

The U.S. Federal Reserve’s interest rate decision and Chair Jerome Powell’s post-policy meeting press conference will take center stage in this holiday-shortened week. The central bank is widely expected to keep the Fed funds rate on hold in a range of 4.25% to 4.50%. Focus will center on any indications of when policymakers might lower interest rates. Recent softer-than-expected consumer and producer inflation data led many market participants to bring forward their expectations for the next rate cut. Market watchers will closely monitor the Fed’s quarterly “dot plot” in its Summary of Economic Projections, which shows FOMC members’ forecasts regarding the path of interest rates.

“The Fed will continue to prioritize the risk of higher inflation expectations, but as the unemployment rate moves further from the full employment rate level, they will pivot toward supporting the economy and labor market,” according to Scott Anderson, chief U.S. economist at BMO Capital Markets.

Investors will also focus on a spate of economic data releases this week. The retail sales report for May will be the main highlight, as it will serve as another gauge of the economy’s health. Wells Fargo’s team of economists stated that the report is expected to indicate “the consumer has yet to run out of steam.” Other noteworthy data releases include U.S. Industrial Production, Manufacturing Production, the Export Price Index, the Import Price Index, Business Inventories, Building Permits (preliminary), Housing Starts, Initial Jobless Claims, Crude Oil Inventories, the Philadelphia Fed Manufacturing Index, and the Conference Board’s Leading Economic Index.

In addition, several notable companies like homebuilder Lennar (LEN), accounting firm Accenture (ACN), grocery chain Kroger (KR), and online used car seller CarMax (KMX) are scheduled to release their quarterly results this week.

Investors are also watching the G7 summit for potential responses to global flashpoints, including the conflict in the Middle East, the war in Ukraine, and ongoing trade tensions.

Meanwhile, the U.S. stock markets will be closed on Thursday in observance of the Juneteenth federal holiday. The markets will reopen on Friday.

Today, investors will focus on the Empire State Manufacturing Index, which is set to be released in a couple of hours. Economists foresee this figure coming in at -5.90 in June, compared to -9.20 in May.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.432%, up +0.18%.

The Euro Stoxx 50 Index is up +0.64% this morning, partially rebounding from Friday’s sell-off as investors grow more confident that the conflict between Israel and Iran will remain contained. Financial and travel stocks outperformed on Monday, while healthcare and utilities stocks retreated. Final data from the statistical office Istat released on Monday showed that Italy’s annual inflation rate eased more than expected in May, reaching its lowest level since February and staying below the European Central Bank’s 2% target for the 20th straight month. Meanwhile, ECB Governing Council member Joachim Nagel said on Monday that the central bank needs to maintain full flexibility on interest rates as uncertainty around the growth and inflation outlook remains high. “We should continue to make decisions on a meeting-by-meeting basis, depending on the data, and not rush into anything,” Nagel said. Investor focus this week is on the Bank of England’s monetary policy decision. The BoE is widely expected to leave its key interest rate unchanged at 4.25% on Thursday. Investors will also focus on the monetary policy decisions from Sweden’s Riksbank on Wednesday, as well as from Norway’s Norges Bank and the Swiss National Bank on Thursday. In corporate news, Kering (KER.FP) surged over +10% after Bloomberg News reported that Renault CEO Luca de Meo is set to become the new chief executive of the luxury goods group.

Italy’s CPI data was released today.

The Italian May CPI came in at -0.1% m/m and +1.6% y/y, weaker than expectations of no change m/m and +1.7% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.35%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.26%.

China’s Shanghai Composite Index closed higher today as investors digested the latest batch of economic data from the country, while closely monitoring the escalating conflict between Israel and Iran. Property stocks led the gains on Monday after a spokesperson from the National Bureau of Statistics said measures to stabilize the sector were gaining traction. Technology stocks also gained ground. Data from the National Bureau of Statistics released on Monday showed that China’s factory output growth hit a 6-month low in May amid trade tensions with the U.S., while retail sales rose at the fastest pace in 15 months, boosted by Beijing’s trade-in policy. Separate data showed that home prices in major cities declined at a faster pace in May, while both property sales and investment continued to fall in the January-May period, underscoring persistent challenges in the sector despite multiple rounds of policy support measures. The mixed batch of data added to the uncertainty surrounding the economic outlook for the remainder of the year, despite a trade truce between Washington and Beijing. Zichun Huang, China economist at Capital Economics, said in a note, “The U.S.-China trade truce was not enough to prevent a broader loss of economic momentum last month.” In other news, China’s central bank on Monday pumped 400 billion yuan into the banking system through outright reverse repos. In corporate news, WuXi Biologics slumped over -5% in Hong Kong after its major shareholder, Wuxi Biologics Holdings, agreed to sell around 83 million existing shares, representing a 2.04% stake, in a block trade.

The Chinese May Industrial Production came in at +5.8% y/y, weaker than expectations of +5.9% y/y.

The Chinese May Retail Sales arrived at +6.4% y/y, stronger than expectations of +4.9% y/y.

The Chinese Fixed Asset Investment stood at +3.7% y/y in the January-May period, weaker than expectations of +4.0% y/y.

The Chinese May Unemployment Rate was 5.0%, stronger than expectations of 5.1%.

Japan’s Nikkei 225 Stock Index closed higher today, buoyed by a temporary weakening of the yen and bets on defense stocks. Defense stocks rallied on Monday after reports emerged that Japan and the EU would hold talks on collaborative measures for the defense industry. Shipping stocks also advanced on expectations for higher freight rates amid the Middle East conflict. Meanwhile, investor focus is now on the Bank of Japan’s monetary policy decision. The central bank is widely expected to hold its policy rate steady at 0.5% at its two-day meeting concluding Tuesday, after Governor Kazuo Ueda signaled last week that inflation still isn’t at target. The focus will be on any adjustments to the pace of its Japanese government bond purchase reductions, with some market watchers expecting a slower pace of reductions. Under its current plan, the BOJ is reducing its JGB purchases by 400 billion yen each quarter through March 2026. On the trade front, Japanese Prime Minister Shigeru Ishiba traveled to Canada on Sunday for trade talks with U.S. President Donald Trump, aiming to convince him to drop tariffs that have threatened Japan’s auto companies. The two are expected to meet on the sidelines of the Group of Seven summit, following a sixth round of high-level trade negotiations in Washington on Friday. In corporate news, Advantest surged more than +9% after JPMorgan raised its price target on the stock on Friday. Also, Nippon Steel rose over +1% after reaching an agreement with the Trump administration to address national-security concerns surrounding its planned $14.1 billion acquisition of U.S. Steel. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -8.13% to 25.21.

Pre-Market U.S. Stock Movers

EchoStar (SATS) jumped over +45% in pre-market trading after Bloomberg reported that U.S. President Trump stepped in to help settle the dispute between the FCC and the company regarding its spectrum licenses.

U.S. Steel (X) climbed more than +5% in pre-market trading after Nippon Steel reached an agreement with the Trump administration to address national-security concerns surrounding its planned $14.1 billion acquisition of the company.

Victoria’s Secret (VSCO) rose more than +2% in pre-market trading after the Wall Street Journal reported that activist investor Barington Capital Group had built a stake in the lingerie retailer.

Cisco Systems (CSCO) gained over +1% in pre-market trading after Deutsche Bank upgraded the stock to Buy from Hold with a price target of $73.

Sarepta Therapeutics (SRPT) plummeted over -30% in pre-market trading after suspending shipments of Elevidys for infusions in non-ambulatory patients following the death of a second patient from acute liver failure.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - June 16th

Lennar (LEN), ReNew Energy Global (RNW), ID Systems (AIOT), Digital Turbine (APPS), Coda Octopus (CODA), RF Industries (RFIL), Globus Maritime (GLBS).