OPENING CALL
Stock futures fell after Israel attacked Iranian nuclear sites and military leaders, and Tehran retaliated with drone strikes.
The news sent investors rushing out of riskier assets and toward safe havens such as gold, with futures for the precious metal rising 1%.
Oil also jumped on heightened fears of supply disruptions.
Stocks to Watch
Oil stocks surged. APA Corp. rose 5%, Occidental Petroleum gained 5.2%, Schlumberger jumped 3.9%, Chevron added 2.7%, and Exxon Mobil rose 3%.
Defense stocks also climbed. Lockheed Martin and Northrop Grumman each rose 4.2%, while L3Harris Technologies gained 3.5%.
Adobe fell 1.5% despite beating earnings and raising its guidance, as AI demand boosted results.
Advanced Micro Devices dropped 1.6% after unveiling new AI chips aimed at challenging Nvidia.
Boeing declined 1% following the crash of an Air India 787, renewing concerns over aircraft safety.
Chime Financial fell 2.2% a day after its trading debut, giving back some of Thursday's strong gains.
Nvidia slipped 1.9% in premarket trading.
Oracle declined 1.3% after surging 13% to a record high Thursday on strong earnings and cloud growth guidance.
RH jumped 18% after reporting a return to profit and strong revenue growth, with upbeat Q2 expectations.
Tesla dropped 2.6% as policy changes removing California's emissions authority raised uncertainty for EV makers.
Economic Insight
Allianz Research now expects the Federal Reserve to keep its policy rate in the 4.25%-4.50% range on hold before cutting it in December, after previously forecasting a cut in October.
This is because inflation is now expected to peak in 4Q rather that prior views of 3Q, it noted.
Watch For:
University of Michigan Preliminary Consumer Survey for June
Today's Top Headlines/Must Reads:
- New Army Reserve Unit Enlists Silicon Valley Executives to Upgrade Tech
- Chinese AI Companies Dodge U.S. Chip Curbs by Flying Suitcases of Hard Drives Abroad
- Walmart and Amazon Are Exploring Issuing Their Own Stablecoins
MARKET WRAPS
Forex:
The dollar recovered slightly after hitting three-year lows on Thursday, with investors seeking safe-haven assets.
Despite some views that the dollar was no longer acting as a safe haven, "when push comes to shove there is still little else that market participants want to own," Pepperstone said.
The euro fell against the dollar.
The currency generally dislikes geopolitical shocks leading to higher energy prices, ING said.
The Swiss franc rose on increased safe-haven appeal.
Bonds:
Treasury yields fell to a one-month low.
However, market reaction could change direction fast, Pepperstone said.
"Financial markets are always incredibly quick to price in geopolitical fear, but tend to be equally quick to discount it again, seeing the risk premium fade in short order."
Danske Bank said strong demand at Thursday's 30-year bond auction also contributed to flailing yields.
A risk-off mood should keep Bunds better supported ahead of the weekend, according to Commerzbank.
That should help the 10-year Bund yield to stay below 2.5%.
Energy:
A broader escalation of the Israel-Iran conflict could push oil toward $90-$100 a barrel, Swissquote said.
But a de-escalation could bring oil back below $70 a barrel, returning focus to supply-demand dynamics, trade disruptions and renewed pressure on Russian oil, it added.
Metals:
Gold futures rose.
The precious metal was nearing its record of $3,509.90 set in mid-April.
TODAY'S TOP HEADLINES
The Only Remedy for Intel's Woes May Be a Breakup
To emerge from a yearslong financial and technological rut, Intel needs to better compete with chip makers like Taiwan Semiconductor Manufacturing Co. It looks increasingly like that will require breaking up the company.
The storied chip maker for decades minted money by designing and making its own chips in its own factories. The model worked well when the company was making the fastest-calculating chips with the smallest transistors in the world.
Scale AI Gets Meta Investment That Values It at More Than $29 Billion
Scale AI has been valued at more than $29 billion after a significant investment from Meta Platforms that will see its founder, Alexandr Wang, join the social-media giant to work on its AI efforts.
The artificial-intelligence startup announced the investment on Thursday, confirming an earlier report by The Wall Street Journal.
French Lender Groupe BPCE to Buy Portugal's Novo Banco for $7.4 Billion
Groupe BPCE agreed to buy Portuguese lender Novo Banco from its majority owner Lone Star for 6.4 billion euros ($7.41 billion) in the latest cross-border deal in European banking.
The French retail bank on Friday said it signed a memorandum of understanding to buy the 75% stake held in the group by Dallas-based private equity group Lone Star in cash. Groupe BPCE is also in talks with the Portuguese government, which owns the remaining 25% of the lender, for a deal on the same terms.
Europe's Exporters Feel the Chill From Trump Tariffs
Europe's exports to the U.S. plunged by a third in April as demand was squeezed by President Trump's tariff increases, leading to a fall in factory output that suggests economic growth has slowed after a strong start to the year.
European Union exports to the U.S. dropped to 47.6 billion euros ($55.2 billion) from 71.5 billion euros a month earlier, statistics body Eurostat said Friday, marking a dramatic reversal from March's record high, when American importers were stocking up ahead of Trump's tariff announcement.
Trump's ICE Raids Empty Construction Sites, Cripple Meat Factory
American businesses that rely on immigrant labor are already absorbing the brunt of stepped-up raids under the Trump administration sweep through worksites, farms, and factories. With a goal of 3,000 arrests a day, Immigration and Customs Enforcement, or ICE, has intensified detentions nationwide-leaving some construction sites deserted, crops unpicked, and employers scrambling.
Across critical sectors, business owners say fear of arrest is driving both undocumented laborers-and legal immigrants-to stay away from worksites.
The Supreme Court Gave the Fed a Lifeline. It Might Not Be Enough.
Markets cheered last month's Supreme Court decision suggesting the Federal Reserve is exempt from a rollback of agency independence. But the ruling's logic may be too weak to hold and could leave the central bank exposed just when it needs autonomy the most.
The court upheld the president's authority to fire members of certain independent agencies, such as the National Labor Relations Board. But in a brief aside, the majority noted that this decision didn't extend to the Fed, implying that the central bank belongs in a different category that remains insulated from presidential control.
Air India Crash Probe Puts Early Focus on Engine Thrust
AHMEDABAD, India-An investigation into the crash of a London-bound Air India Boeing 787-8 that killed more than 240 people is focusing on whether the aircraft had a loss or reduction in engine thrust, and if that contributed, according to people briefed on the probe.
The aircraft crashed shortly after taking off with 242 people on board on Thursday, leaving a single survivor and killing at least four people in the residential area where it went down.
Hundreds of 'No Kings' Rallies Planned in Opposition to Trump
Boasting tanks, cannons, soldiers and fireworks, President Trump's military parade Saturday is designed to be a spectacle. Opponents to Trump want their nationwide protests that day to be an even bigger one.
Progressive groups including the American Civil Liberties Union, American Federation of Teachers, Planned Parenthood and Sen. Bernie Sanders's campaign office are planning peaceful protests in over 2,000 cities across the U.S.
Write to don.forbes@wsj.com
TODAY IN CANADA
Earnings:
Nothing expected.
Economic Indicators (ET):
Industrial capacity utilization rates for 1Q
New motor vehicle sales for April
Monthly Survey of Manufacturing for April
Wholesale trade for April
Stocks to Watch:
Dundee Precious Metals Announces Proposed Acquisition Of Adriatic Metals; to Acquire Adriatic Metals for Implied Equity Value of Approximately $1.3B; Upon Completion of Deal, DPM to Acquire 100% of Vares Operation in Bosnia, Herzegovina Mine; Transaction to Become Effective No Later Than Dec. 31; Deal to Grow DPM's Production Up to 425,000 Gold Equivalent Ounces in 2027
Wall Financial 1Q EPS C$0.18; 1Q Rev and Other Income C$43.8M
Expected Major Events for Friday
04:30/JPN: Apr Tertiary Industry Index
04:30/JPN: Apr Revised Industrial Production
06:00/GER: May CPI
06:00/GER: May WPI
06:45/FRA: May CPI
08:00/ITA: Apr Foreign Trade EU
12:30/CAN: 1Q Industrial capacity utilization rates
12:30/CAN: Apr New motor vehicle sales
12:30/CAN: Apr Monthly Survey of Manufacturing
12:30/CAN: Apr Wholesale trade
14:00/US: Jun University of Michigan Survey of Consumers - preliminary
17:59/UK: May Bank of England/Ipsos Inflation Attitudes Survey
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Friday
Charles Schwab Corp (SCHW) is expected to report.
Coffee Holding Co Inc (JVA) is expected to report $0.06 for 2Q.
Gencor Industries Inc (GENC) is expected to report for 2Q.
Quantum Corp (QMCO) is expected to report for 4Q.
Sonoma Pharmaceuticals Inc (SNOA) is expected to report for 4Q.
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ANALYST RATINGS ACTIONS
Conagra Brands Cut to Underperform From Neutral by B of A Securities
Conmed Cut to Hold From Buy by Needham
Datavault AI Raised to Buy From Hold by Maxim Group
Joby Aviation Cut to Neutral From Overweight by Cantor Fitzgerald
Ouster Cut to Hold From Buy by WestPark Capital
(MORE TO FOLLOW) Dow Jones Newswires
06-13-25 0614ET
