U.S. Strikes on Iran Impact Markets, Analysts Discuss Economic Outlook

CHICAGO, Ill. — This week, U.S. markets reacted to the news of U.S. airstrikes hitting three Iranian nuclear sites over the weekend. Morningstar‘s Chief U.S. Market Strategist Dave Sekera said on The Morning Filter that despite the geopolitical tension, stock futures are only slightly in the red.

“The market is pricing in essentially no escalation,” Sekera explained. “Even with Iran‘s threats to close the Strait of Hormuz, investors seem skeptical about any meaningful retaliation.”

In the aftermath of the strikes, oil prices increased less than a dollar, maintaining trade below $75 a barrel. “We are still kind of right in the middle of the range,” Sekera added, referencing three years of oil price data.

Following the market’s subdued reaction, Sekera suggested that watching oil prices can provide insights into the unfolding situation. “Rising oil prices would indicate escalating tensions, while falling prices suggest a de-escalation,” he said.

Regarding economic indicators, Sekera mentioned the Federal Reserve’s recent decision to keep interest rates unchanged and its unchanged forecast for the remainder of 2025. “Nothing significant came out of the Fed meeting,” Sekera stated, pointing to the committee’s reliance on data to manage inflation and employment.

Upcoming economic reports this week include Personal Consumption Expenditures (PCE) and durable goods orders, which Sekera believes have uncertain outcomes. “Consensus points to moderate inflation from PCE, but economic metrics might not provide clear readings for a while,” he noted.

Sekera also commented on the recent earnings reports from companies like Lennar and Darden. Lennar reported sluggish home sales, while Darden saw an increase in same-store sales, suggesting resilience in the consumer sector despite rising food prices.

“Consumers are still willing to spend on dining out,” Sekera remarked. He stressed that while Darden outperformed expectations, the macroeconomic impact of consumer spending remains uncertain.

In the technology sector, stocks like Marvell Technology and Advanced Micro Devices (AMD) were discussed. Sekera highlighted that Marvell’s latest growth expectations could reflect a strong market position in AI, while AMD remains a competitive player but trades at a slight premium to fair value.

As the week progresses, investors are advised to monitor developments in both the geopolitical climate and upcoming economic data releases to steer their decision-making.