Breakfast News: U.S. Enters Israel-Iran War

Breakfast News: U.S. Enters Israel-Iran War

Source: Image Created by Jester AI.

1. Stocks Shake Off Middle-East Fears

Markets have largely shrugged off the shock from the weekend's U.S. strikes on Iranian nuclear sites. The S&P 500 dipped 0.2% last week as the Nasdaq gained 0.2%, before S&P 500 futures slipped as much as 0.8% Sunday. Futures have since reversed course, and rose slightly Monday morning. Dan Ives at Wedbush sees today's market reaction as one of "relief with the nuclear threat now gone for the region," though the results of the action are not yet confirmed.

• WTI Crude close to $75: Oil prices have jumped, with international benchmark Brent Crude above $78. There are fears that Iran might close the Strait of Hormuz, which JPMorgan (JPM -0.23%) analysts say could push oil above $120.
• "Long-term investing means looking past the immediate": Fool analyst Tim Beyers urged investors to avoid sudden moves: "Long term, there's incentive for global trade to get back on track. I recognize that's the rational argument and irrationality could reign for a bit. Hang tight and hold fast anyway. We're playing the long game."

2. Tesla Robotaxi Trundles Out

The long-awaited launch of Tesla's (TSLA 10.55%) driverless taxi service finally happened Sunday, in a lower-profile event than we might have previously envisaged. The event in Austin, Texas saw selected investors and influencers take rides, with a Tesla employee along to keep an eye on things.

• "Robotaxis are critical to the Tesla investment case": RBC Capital Markets analyst Tom Narayan suggests about 60% of the stock's valuation is based on autonomous driving.
• Beating the S&P 500 by 94% since 2024 Hidden Gems recommendation: Tesla has been regaining ground since CEO Elon Musk ended his White House work, and it's up 77% over the past 12 months.

3. Key Earnings to Watch This Week

Rule Breakers recommendation FactSet Research Systems (FDS 2.98%) will post a third-quarter earnings update before today's opening bell, as analysts predict a 5.2% rise in revenue year over year with gains expected globally. The consensus suggests a 1.4% drop in earnings per share from last year's Q3.

• Fourth-quarter revenue expected to dip 1%: We're due a Q4 update from FedEx (FDX 0.72%) Tuesday, following a revenue beat but earnings miss in the previous quarter. Watch for cost-cutting progress and adverse economic pressure.
• Number 5 in May's Stock Advisor Rankings: Nike (NKE 0.45%) will report Q4 Thursday. Eyes will be on CEO Elliott Hill's "Win Now" strategy, refocusing on core athletic categories, after he returned to the top job in October 2024 and revamped the leadership team.

4. The Week in Economics

Friday brings the May Personal Consumption Expenditures (PCE) print, expected to reach 2.3% year over year, up from April's 2.1%. The Core PCE figure – which excludes food and energy prices – is the Federal Reserve's favorite inflation measure, as it shows a less volatile picture.

• Trade deficit halved in April: It follows Thursday's U.S. goods trade balance update for May, after April saw an $87.6 billion deficit affected by tariffs. A GDP data revision is due the same day, currently showing a 0.2% drop.
• Summer Davos 2025: Officially known as the 16th Annual Meeting of New Champions, The World Economic Forum (WEF)'s latest China-based conference takes place in Tianjin Tuesday to Thursday. Global trade wars are a key part of what WEF managing director Gim Huay Neo describes as exceptional economic uncertainty.

5. Your Take

What's your personal stance on investing in 'sin stocks'? Are there market-beating growth opportunities or a reliable stream of dividends to consider? Debate with friends and family, or become a member to hear what your fellow Fools are saying.