U.S. stock futures were trading lower on Tuesday following Monday’s advance. Futures of major benchmark indices were lower in premarket.

President Donald Trump called on Iranians to leave Tehran, pointing to the government’s refusal to accept a deal aimed at limiting nuclear weapons development, amid ongoing attacks between Israel and Iran that marked the fifth consecutive day on Tuesday.

At the G7 summit in Canada, world leaders urged a reduction in tensions during the most severe clash ever between these regional adversaries, labeling Iran as a source of instability and insisting it must never acquire nuclear weapons, while also recognizing Israel’s right to self-defense.

Trump took to Truth Social on Monday to clarify his abrupt departure from the G7 Summit in Canada. He refuted Macron's claim that he was returning to Washington to negotiate a ceasefire between Israel and Iran. "He has no idea why I am now on my way to Washington, but it certainly has nothing to do with a Cease Fire. Much bigger than that," Trump wrote.

Trump had previously urged citizens of Tehran, Iran's capital, to evacuate immediately, indicating a potential U.S. involvement in the conflict.

Meanwhile, President Trump, while on Air Force One returning from the G-7 summit, told reporters he is seeking “a real end” to Iran’s nuclear issue, with Tehran giving it up “entirely.”

The 10-year Treasury bond yielded 4.43% and the two-year bond was at 3.96%. The CME Group's FedWatch tool‘s projections show markets pricing a 99.9% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.

Cues From Last Session:

Communication services, information technology, and consumer discretionary stocks recorded the biggest gains on Monday, leading most sectors on the S&P 500 to close on a positive note, while utilities and health care stocks bucked the overall market trend, ending the session lower.

Sage Therapeutics Inc. (NASDAQ:SAGE) shares surged over 35% on Monday following Supernus Pharmaceuticals’ agreement to acquire the company.

Conversely, shares of Sarepta Therapeutics, Inc. (NASDAQ:SRPT) dropped more than 42% after the company halted ELEVIDYS shipments and paused the ENVISION trial due to a second fatal liver failure in non-ambulatory Duchenne patients.

On the economic front, the New York Empire State Manufacturing Index fell to a reading of -16 in June, down from May's figure of -9.2 and below market expectations of -5.5.

The Dow Jones index ended 317 points or 0.75% higher at 42,515.09, whereas the S&P 500 index rose 0.94% to 6,033.11. Nasdaq Composite advanced 1.52% to 19,701.21, and the small-cap gauge, Russell 2000, gained 1.12% to end at 2,124.13.

Insights From Analysts:

Despite the dominating geopolitical headlines, a senior economist at WisdomTree, Jeremy Siegel, told investors that they need to focus on the more meaningful development: “the continued softening of inflation data.”

“Both CPI and PPI came in on the low side, confirming the disinflationary trend that's been evident. These price increases have not yet fully worked their way into the data and are likely to show up over the next couple of months. Even so, the underlying trend is down (excluding tariff impacts coming up). My view remains firm: ex-tariffs, inflation is cooling, and the Fed should begin easing policy,” he said.

He said that he remains “optimistic” about the stock market. “Markets have shown impressive resilience, inflation is heading in the right direction, and the Fed will ultimately come along. Stay focused on fundamentals and avoid getting whipsawed by noise,” he added.

Meanwhile, Jeff Buchbinder, the chief equity strategist at LPL Financial explained that there are several key questions to answer before we know how stocks will handle this geopolitical shock, including how much of Iran's energy infrastructure will be impaired and for how long, whether Iran's nuclear capabilities will be completely wiped out, and whether the current regime will remain in power.

For those surprised that the U.S. stock market held up well on Monday, Buchbinder argued that it was a combination of several factors:

• The likelihood of regime change in Iran and a resulting "peace dividend",
• U.S. energy independence,
• Israel's interest in limiting the suffering of Iranian civilians (which could mean limited disruption to oil production facilities), and
• Both players have limited resources and an interest in keeping the conflict contained.

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on Tuesday:

• May’s U.S. retail sales and import price index will be out by 8:30 a.m. ET.
• May’s industrial production and capacity utilization will be announced by 9:15 a.m. ET.
• April Business inventories data and June’s home builder confidence index data will be released at 10:00 a.m. ET.

Stocks In Focus:

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading higher in the early New York session by 1.48% to hover around $71.29 per barrel.

Gold Spot US Dollar fell 0.18% to hover around $3,379.21 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was higher by 0.19% at the 98.1870 level.

Asian markets ended mixed on Tuesday as South Korea's Kospi and Japan's Nikkei 225 indices rose. While China’s CSI 300, Hong Kong's Hang Seng, Australia's ASX 200, and India's S&P BSE Sensex indices declined. European markets were lower in early trade.

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