Morning in New York: market awaits Trump's decision on Iran strikes

Daily review and forecast of events on the US stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

In the center of attention of investors remains the situation in the Middle East. The White House on the eve reported that Donald Trump will decide on the advisability of U.S. participation in hostilities against Iran within two weeks. The presidential administration emphasizes that the main goal remains to prevent the Islamic Republic from having nuclear weapons, but considers a diplomatic solution as the priority way to achieve this goal. Against the backdrop of the ongoing exchange of blows between Israel and Iran, the threat of a widening conflict remains.

The trade agenda also remains tense. Canada has warned that it may raise duties on U.S. steel and aluminum from July 21 in the absence of progress in negotiations with Washington. Additionally, restrictions are being imposed on the use of foreign metals in government projects. Representatives of the European Commission reported progress in trade dialog with the U.S., but emphasized readiness for retaliatory measures in case of new duties from the U.S. side.

Among the macroeconomic events today is the publication of the manufacturing activity index from FRB Philadelphia for June. The consensus assumes the value of the index at -1.5 points after -4 a month earlier, which signals the continuation of the recession.

Prior to the opening of the main session, Accenture (ACN), Carmax (KMX) and Kroger (KR) will present quarterly results.

Futures on U.S. indices earlier showed a noticeable decline, but after the postponement of the U.S. decision on Iran, they recovered almost to the closing levels of June 18. We assess the balance of risks as neutral with an average level of volatility. We focus on S&P 500 movements in the range of 5940-6020 points (from -0.7% to +0.7% to the previous closing level).

- OpenAI risks losing up to $20 billion in investment if it fails to agree with Microsoft (MSFT) to restructure into a limited profit organization format. Negotiations with the corporation have stalled. OpenAI is considering the option of appealing to antitrust authorities.

- SoftBank has proposed creating a $1 trillion technology park in Arizona for AI and robotics projects. Discussions are underway with TSMC (TSM) and U.S. authorities on this issue and tax incentives.

- SpaceX has suffered another setback: the Starship rocket exploded during ground testing in Texas. According to Ilon Musk, the cause was a failure in the gas storage system. The investigation is ongoing.

On June 19, American stock markets were closed due to the celebration of Liberation Day. The previous session on U.S. stock exchanges ended mixed. S&P 500 lost a symbolic 0.03%, Nasdaq 100 closed unchanged, Dow Jones decreased by 0.1%, and Russell 2000 increased by 0.52%.

The main event of the day was the Fed meeting, following the results of which the rate was expectedly left unchanged. The updated forecast for 2025 still provides for two rate cuts. The regulator's inflation (PCE) guideline is raised to 3%. The GDP growth benchmark is lowered to 1.4%. The regulator removed any mention of upside risks to unemployment and inflation from the final statement, noting continued heightened uncertainty about the outlook for the economy. Jerome Powell's conference was also without surprises.

The number of initial jobless claims for the previous week, in line with expectations, amounted to 245k. Housing market data disappointed. The volume of new construction in May fell by 9.8% mom to 1.256 million, while the number of building permits issued fell by 2% mom to 1.393 million. Both results were the lowest since 2020.

- Against the backdrop of the Senate passing the GENIUS bill establishing a regulatory framework for stablecoins, the securities of Circle Internet Financial (CRCL: +33.8%) soared. The market was positive on the progress of the initiative, which will go to the House of Representatives in July.

- The growth of Coinbase (COIN: +16.3%) quotations was supported by both progress in the regulation of stablecoins and the presentation of a new payment solution Coinbase Payments, focused on e-commerce platforms.

- Shares of Marvell Technology (MRVL: +7.1%) rose solidly after the Custom AI event: the company improved its forecast for data center market capacity by 2028 and noted the increasing contribution of XPU solutions in the custom chip segment.