Oil Hits 4-Week High on Iran Strikes as Wall Street Awaits CPI
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- US stock futures were mixed premarket: Dow E-minis fell 0.22% (118 points), S&P 500 E-minis slipped 0.01%, while Nasdaq 100 E-minis gained 0.48% (142.75 points), with chip stocks rebounding via a 2.4% rise in the iShares Semiconductor ETF (SOXX) after the .IXIC fell 1.6% on Monday.
- Oil futures reached their highest level in four weeks, fueled by a third consecutive night of US military strikes against Iran and the prospect of a 20% fee on cargo ships transiting the Strait of Hormuz.
- JPMorgan Chase, Goldman Sachs, Wells Fargo, and Citigroup were set to kick off second-quarter earnings on Tuesday, with investors watching for early signals on corporate health after a roughly 10% year-to-date S&P 500 (.SPX) rally.
- June CPI data, due at 8:30 a.m. ET, was expected to show inflation eased — though Swissquote's Ipek Ozkardeskaya warned 'gasoline prices are already back above June levels, meaning the next inflation report will heat up again.'
- Fed rate-hike odds jumped to a 43% chance of a quarter-point increase at the July 29 meeting, up from 34% a day earlier on CME's FedWatch, after Fed Governor Christopher Waller said higher rates may be needed 'in the near term' if inflation remains well above the 2% target.
- Fed Chair Kevin Warsh was scheduled to deliver the central bank's semi-annual monetary policy report to Congress at 10 a.m. ET, adding a second potential catalyst to the session.
Why it matters: Iran-driven oil gains and hawkish Fed rhetoric have pushed rate-hike odds from 34% to 43% in a single session — a sharp reversal from the disinflation narrative that powered this year's ~10% S&P 500 rally. Earnings from JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup will test whether corporate America can justify the year's elevated valuations under tightening monetary conditions.
