Wall St set for higher open after Friday’s sell-off amid Mideast jitters

WALL Street’s main stock indexes eyed a higher open on Monday after a bruising sell-off in the previous session on the back of disappointing earnings from some big U.S. banks, while escalating tensions in the Middle East made investors wary.

All three major indexes fell more than 1% on Friday, registering weekly losses.

President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu the United States would not participate in a counter-offensive against Iran – an option Netanyahu’s war cabinet favors after a mass drone and missile attack on Israeli territory – according to officials familiar with the development.

Iran launched the attack after a suspected Israeli strike on its embassy compound in Syria on April 1 that killed top Revolutionary Guards commanders. However, Iran’s attack, launched using more than 300 missiles and drones, caused only modest damage in Israel.

Defense stocks like Lockheed Martin, General Dynamics and RTX Corp gained between 0.9% and 1.9% in premarket trading.

On the earnings front, Goldman Sachs gained 4.1% after its first-quarter profit beat Wall Street estimates as a recovery in underwriting and dealmaking boosted its investment banking unit, helping it post the highest earnings per share since 2021.

Meanwhile, U.S. retail sales rose 0.7% in March, compared to a 0.3% rise estimated by economists polled by Reuters.

“Certainly we’re at a place in time this week where the economic data in large part will take a backseat to the earnings reports,” said Art Hogan, chief market strategist at B Riley Wealth.

“But as it pertains to the retail sales, good news is good news. We’re in that place that better news in terms of economic growth is certainly going to be a positive for markets now.”

U.S. equities have sold off recently as investors sharply readjusted their expectations of how much the Fed would cut rates this year. Traders have priced in only 39 basis points of cuts this year, according to LSEG data, down from about 150 bps at the start of the year.

Also on the docket are comments from Dallas Federal Reserve President Lorie Logan later in the day. Fed Chair Jerome Powell is scheduled to speak on Tuesday.

At 8:37 a.m. ET, Dow e-minis were up 324 points, or 0.85%, S&P 500 e-minis were up 41 points, or 0.79%, and Nasdaq 100 e-minis were up 159 points, or 0.87%.

Most megacap growth stocks gained in premarket trading. However, Apple fell 0.4% after data from research firm IDC showed the company’s smartphone shipments dropped about 10% in the first quarter of 2024.

Tesla will lay off more than 10% of its global workforce, an internal memo seen by Reuters showed. Shares of the EV maker were last down 0.8%.

Salesforce dipped 2.8% after Reuters reported, citing a source, that the customer relations software maker was in advanced talks to acquire Informatica. – Reuters