Morning Wrap: ASX 200 to fall, S&P 500 and Dow slump, Israel and Iran trade strikes

ASX 200 futures are down 20ts (-0.23%) as of 8:30 am AEST.

In a nutshell:

• US stocks tumbled as the Israel-Iran conflict intensified over the weekend

• The conflict is expected to take "weeks, not days", according to the the US and Israeli officials

• Gold and oil prices soared amid a flight to safe havens and concerns about supply

Let's dive in.

S&P 500 SESSION CHART

S&P 500 lower, finished near session lows (Source: TradingView)

OVERNIGHT MARKETS

• Major US benchmarks sharply lower and near worst levels

• US weekly recap: Russell 2000 (-1.49%), Dow (-1.32%), Nasdaq (-0.63%) and S&P 500 (-0.39%)

• Risk off session amid rising geopolitical tensions, with Iran retaliating with ballistic missiles on Israel after Israel conducted air strikes against Iran’s nuclear facility, killing senior military officials and nuclear scientists

• Volatile oil prices, with Brent crude closing the session 5.8% higher (US$74.3), down from session highs of 11.6% (US$78.4)

• US equity funds hit by biggest outflows in 11 weeks, BofA says (BBG)

• US corporate insiders selling stock at fastest pace since November (BBG)

STOCKS

• Nvidia to exclude China from earnings guidance (CNN)

• Apple's iPhone sales surged in May, led by China and growing 15% globally (RT)

• Meta finalizes $15bn investment for a 49% stake in Scale AI, enhancing its AI capabilities and strategy (BBG)

• Amazon, Walmart exploring issuing their own stablecoins in the US, alongside discussions by Expedia and airlines (BBG)

• Adobe sales guidance tops expectations but shares slip as investors skeptical about its ability to compete with AI-focused startups (BBG)

• Novo Nordisk becomes Europe's most valuable public company, surpassing SAP, with a market cap of $365bn (BBG)

GEOPOLITICS

• Israel, Iran trade attacks for third consecutive day in what PM Netanyahu calls "an existential campaign", Tehran's Foreign Minister says Iran's responses will stop if Israel's strikes stop (BBG)

• Trump says Iran and Israel need to make a deal, says many calls and meeting now taking place, may also suggest possible US involvement (ABC)

• Trump says remains committed to diplomatic resolution to Iran nuclear issue but Iran says will not join further talks with the US (RT)

• Israel's operations against Iran's nuclear sites marks a new Middle East war (BBG)

• Israel's attacks killed Iran's top military leaders, potentially destabilising Tehran's command and escalating conflict (BBG)

TARIFFS

• China withholding export of certain military-use rare earths, while the US maintains its export curbs on China's purchases of AI chips, signaling lack of progress despite recent handshake deal (Reuters)

• US and Vietnam closing in on trade deal that could put Vietnam tariffs in 20-25% range and include tougher enforcement of transshipment of Chinese products (BBG)

• Trump-Xi call helped ease tensions, but prospect of meeting unclear with Xi not expected to attend UN GA in September (SCMP)

• Trump administration mull using Defense Production Act to prioritise and fund rare earths projects (BBG)

ECONOMY

• China activity data forecast to show steady industrial and fixed-asset investment in May, while retail sales growth likely slipped below 5% (BBG)

• China's credit growth slowed in May, with new loans below expectations amid economic pressures (BBG)

• Eurozone industrial production fell 2.4% in April, signaling economic challenges amid US tariff impacts (RT)

ASX TODAY

• Adriatic Metals to be acquired by Dundee Precious Metals, shareholders to receive 0.159 new DPM shares, valuing Adriatic at $5.56 per share (ADT)

• Black Cat Syndicate says 4,500 oz of gold has been retained and in storage, with management saying its hard to justify producing a safe haven asset and then converting it into an asset that's losing purchasing power, in cash (BC8)

• Bubs Australia launches new infant formula submission with US FDA (BUB)

WHAT TO WATCH TODAY

• Middle East volatility: Israel and Iran continued intense bombardments over the weekend, with growing international concern the conflict will turn into a wider regional war. Key gas and oil-related facilities have not been targeted so far, according to Bloomberg. Commodity markets have just opened, with gold trading around 0.2% higher and Brent crude up around 2% to US$76/lb. The conflict will likely drive further downward pressure on equities, and upward pressure on key commodities.

BROKER MOVES

• Domino's Pizza upgraded to Neutral from Underweight but target cut to $22.90 from $29.50 (JPM)

Stocks trading ex-dividend: 

• Mon 16 Jun: Whitefield Income (WHI) – $0.006

• Tue 17 Jun: None

• Wed 18 Jun: Aft Pharmaceuticals (AFP) – $0.011

• Thu 19 Jun: None

• Fri 20 Jun: None

Other ASX corporate actions today: 

• Dividends paid: Otto energy (OEL)

• Earnings: None

• IPOs: None

• AGMs: None

Economic calendar (AEST):

• 11:30 am: China House Price Index (May)

• 12:00 pm: China Industrial Production, Retail Sales, Fixed Asset Investment (May)