Investors swiftly navigated past the fallout from Israel’s recent strike against Iran, which triggered substantial volatility across global markets overnight. As the Wall Street open approached, futures tied to the S&P 500 and Dow managed to erase the entirety of last night’s downturn.
S&P 500 futures exhibited a gain of 2 points, or less than 0.1%, reaching 5,051 after recovering from an overnight plunge of up to 1.7%. Similarly, Dow futures climbed 12 points, or 0.1%, reaching 38,022, rebounding from their overnight low of 37,463.
Nasdaq-100 futures experienced a marginal decline of just 5 points, or less than 0.1%, reaching 17,546.
The initial reaction to reports of Israel’s retaliatory strike against a major Iranian military airbase near Isfahan led to a flurry of activity, with stock futures plummeting and Treasury yields tumbling, while crude-oil prices surged by roughly 3%.
However, the overnight jump in crude-oil futures has since been reversed, with U.S.-traded West Texas Intermediate crude for May delivery now down by 33 cents, or 0.5%, at $82.33 a barrel.
Similarly, Treasurys witnessed a swift turnaround, with the 10-year yield down by just 4 basis points at 4.60% after reaching 4.50% late Thursday. The reaction in bond yields mirrored that of futures, moving inversely.
In currency markets, the U.S. dollar retraced nearly all of its overnight losses against the Japanese yen, trading marginally lower at 154 yen. The Swiss franc, another asset often sought during market stress, partially retraced its overnight gain but remained up by 0.4% against the U.S. dollar at $1.10.
Stress indicators in equity derivatives markets also eased, with the Cboe Volatility Index (VIX) declining from nearly 21.5 overnight to 18.8 in recent trade. The VIX, often referred to as Wall Street’s “fear gauge,” reflects activity in S&P 500 options.
Bitcoin resumed its rally after briefly dipping below $60,000, trading above $65,000 shortly after 8 a.m. in New York on Friday. Meanwhile, gold futures experienced a decline of $5.80, or 0.3%, reaching $2,392 an ounce after peaking at $2,430 overnight.
Reports indicating that Iran was not planning an immediate retaliation against Israel contributed to the market’s stabilization and reversal of overnight movements.
