US stock futures rise after weekly losses; Iran-Israel tensions, earnings in focus

Investing.com-- US stock index futures rose in evening deals on Sunday, recovering slightly from steep losses last week as fears of an Iran-Israel conflict battered risk sentiment, while the first quarter earnings season kicked off on a dour note.

Signs of sticky U.S. inflation also saw investors largely price out expectations that the Federal Reserve will cut interest rates in the first half of 2024, presenting an outlook of higher-for-longer rates.

S&P 500 Futures rose 0.3% to 5,183.50 points, while Nasdaq 100 Futures rose 0.3% to 18,240.25 points by 19:57 ET (23:57 GMT). Dow Jones Futures rose 0.2% to 38,329.0 points.

Iran-Israel conflict in focus 

Concerns over a wider conflict in the Middle East were front and center after Iran launched a mass drone and missile attack on Israel over the weekend.

While the strike reportedly caused minimal damage, it drew up the possibility of retaliation by Israel. But Israeli ministers reportedly signaled that retaliation will not be immediate.

Iran also declared that its operation had concluded with no plans for further action against Israel. The weekend strike was in retaliation for an alleged Israeli strike against an Iranian consulate in Damascus. 

Wall Street nurses weekly losses amid waning rate cut hopes 

Wall Street indexes were hit with a storm of negative factors over the past week, which also spurred a heavy dose of profit-taking. 

The S&P 500 fell 1.5% to 5,123.41 points on Friday, while the NASDAQ Composite fell 1.6% to 16,175.09 points. The Dow Jones Industrial Average finished down 1.2% at 37,983.24 points.

All three indexes lost between 0.6% and 2.5% last week. 

Waning optimism over early U.S. interest rate cuts was the biggest weight on stock markets, as a swathe of sticky inflation data saw investors sharply pare bets on a June interest rate cut. 

Weak earnings from several major Wall Street banks also weighed, setting a dour tone for the first quarter earnings season. 

Goldman Sachs, Johnson&Johnson earnings on tap 

The earnings season is set to pick up pace in the coming days. Goldman Sachs Group Inc (NYSE:GS) will report its first quarter results on Monday, as will Charles Schwab Corp (NYSE:SCHW). 

Johnson&Johnson (NYSE:JNJ), UnitedHealth Group Incorporated (NYSE:UNH), Bank of America Corp (NYSE:BAC) and Morgan Stanley (NYSE:MS) are set to report their first quarter earnings on Tuesday. 

Focus will be squarely on the impact of sticky inflation and whether Wall Street can justify a melt-up in valuation through the first quarter.