U.S. stock futures slid early Monday as investor sentiment was hit by an upsurge of violence in the Middle East.
“Such geopolitical tension is traditionally and unsurprisingly negative on sentiment, with investors likely to be unsettled by the prospect of further uncertainty,” said Richard Hunter, head of markets at Interactive Investor. U.S. stock futures dived as bourses in much of Europe and Asia sold off, while traders moved into the perceived havens of gold GC00, +0.98%, the U.S. dollar DXY and government bonds, such as the German bund BX:TMBMKDE-10Y.
Indeed, traders may find their focus soon switches this week back to monetary to corporate issues. Markets ultimately reacted positively to what on the surface was a strong nonfarm payrolls report published Friday, as traders believe it was not so hot it would move the needle on Fed policy. Forecasts suggest analysts have become less confident about corporate profitability in recent weeks. Aggregate S&P 500 earnings are expected to decline by 0.3% for the year to Q3 2023, which would mark the fourth consecutive quarter of falling earnings, according to John Butters, senior earnings analysts at Factset.