U.S. Stocks May See Further Downside As U.S., Iran Exchange Attacks

(RTTNews) - After ending yesterday's volatile session mostly lower, stocks may see further downside in early trading on Wednesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.5 percent.

Concerns about a re-escalation of the conflict in the Middle East may weigh on Wall Street following the latest exchange of attacks between the U.S. and Iran.

U.S. Central Command said forces completed "self-defense strikes" against Iran on Tuesday at President Donald Trump's direction in response to the downing of a U.S. helicopter.

CENTCOM said forces struck Iranian air defense, ground control stations, and surveillance radar sites near the Strait of Hormuz with precision munitions from U.S. Air Force and Navy fighter jets.

In retaliation, Iran attacked U.S. bases in Kuwait, Bahrain and Jordan and vowed it would leave no attack or threat unanswered.

Trump said in a subsequent post on Truth Social this morning that Iran has "taken too long to negotiate a deal" and will now have to "pay the price!"

The futures regained some ground following the release of a Labor Department report showing consumer prices in the U.S. increased in line with economist estimates in the month of May.

The Labor Department said its consumer price index rose by 0.5 percent in May after climbing by 0.6 percent in April. The price growth matched expectations.

The annual rate of consumer price growth accelerated to 4.2 percent in May from 3.8 percent in April, which was also in line with estimates.

The report also said core consumer prices, which exclude food and energy prices, crept up by 0.2 percent in May after rising by 0.4 percent in April. Economists had expected core prices to increase by 0.3 percent.

The annual rate of core consumer price growth inched up to 2.9 percent in May from 2.8 percent in April, which matched expectations.

Following the sell-off seen last Friday and the subsequent rebound on Monday, stocks went on another roller coaster ride over the course of the trading session on Tuesday.

The major averages moved to the upside early in the session before pulling sharply only to regain ground in afternoon trading.

The tech-heavy Nasdaq eventually ended the session down 250.84 points or 1 percent at 25,678.82. The S&P 500 also fell 19.08 points or 0.3 percent to 7,386.65, while the narrower Dow rose 86.10 points or 0.2 percent to 50,872.11.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slumped by 1.9 percent, while China's Shanghai Composite Index declined by 0.4 percent.

The major European markets have also moved to the downside on the day. While the German DAX Index is down by 0.7 percent, the French CAC 40 Index is down by 0.3 percent and the U.K.'s FTSE 100 Index is down by 0.2 percent.

In commodities trading, crude oil futures are jumping $1.09 to $89.29 a barrel after plunging $3.10 to $88.20 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,184.10, down $102.30 compared to the previous session's close of $4,276.40. On Tuesday, gold slumped $77.

On the currency front, the U.S. dollar is trading at 160.34 yen compared to the 160.36 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1562 compared to yesterday's $1.1543.