Futures fall as Middle East tensions simmer and Netflix collapses | The mighty 790 KFGO

(Reuters) – U.S. stock index futures fell on Friday as investors turned risk averse following reports of an escalation in the Middle East conflict, while Netflix fell in premarket trading after the company forecast current quarter revenue would be below estimates to stay.

Israel launched an attack on Iranian territory on Friday, sources said, in the latest tit-for-tat exchange between the two arch-enemies, whose decades of shadow war erupted into the open and threatened to drag the region deeper into conflict.

“It does not appear that the intention is to cause widespread damage, including to nearby military bases, and trigger a full-scale war between states, which we still consider highly unlikely,” wrote Hasnain Malik, head of equity research at Tellimer. remark.

The CBOE Volatility Index, also known as Wall Street’s “fear gauge,” rose 1.83 points to 19.83, its highest level in more than five months.

On the earnings front, Netflix fell 6.3% in premarket trading after the streaming video pioneer’s lackluster second-quarter guidance.

Shares of other streaming service providers such as Walt Disney and Roku fell 1.3% and 1.5%, respectively.

At 5:05 a.m. (ET), the Dow e-minis were down 131 points, or 0.34%, the S&P 500 e-minis were down 22.5 points, or 0.45%, and the Nasdaq 100 e-minis were down 124.5 points, or 0.71%.

The S&P 500 and Nasdaq closed lower for a fifth straight session on Thursday as economic data and comments from Fed officials suggested the US central bank was unlikely to cut interest rates in the near future.

Federal Reserve policymakers have coalesced around the idea of ​​keeping borrowing costs at their levels well into the year, given slow and bumpy progress on inflation and a still-strong U.S. economy.

Stocks were in turmoil this week as investors revised their expectations for how much the Fed would cut rates this year, with both the S&P 500 and the blue-chip Dow poised for a third weekly decline, while the Nasdaq fell for the fourth straight week. loss, if the current trend continues.

Money markets are now pricing in around 40 basis points of central bank cuts, down from around 150 basis points at the start of 2024, according to LSEG data.

Most mega-cap growth stocks also fell, with Apple, Nvidia, Meta Platforms and Tesla down between 0.4% and 1.9%.

Shares of Paramount Global rose 10.7% after a person familiar with the matter told Reuters that Sony Pictures Entertainment and Apollo Global Management are discussing making a joint bid for the company.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Sherry Jacob-Phillips)