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Futures are recovering from the intense events of the last session, amid unrest in the Middle East

(Reuters) – U.S. stock index futures rose on Monday after Wall Street witnessed a heavy sell-off following disappointing profits from some major U.S. banks last week and escalating tensions in the Middle East left investors wary.

All three major indexes fell more than 1% last session, recording weekly losses after results from major US banks failed to impress.

President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu that the US would not engage in a counter-offensive against Iran – an option favored by Netanyahu’s war cabinet after a massive drone and missile attack on Israeli territory – according to officials familiar with the development.

Iran launched the attack after a suspected Israeli attack on its embassy complex in Syria on April 1, killing top Revolutionary Guard commanders. However, Iran’s attack, launched using more than 300 missiles and drones, caused only modest damage in Israel.

With first-quarter earnings season in full swing, investors will be watching for numbers from broker Charles Schwab and lender Goldman Sachs before the opening bell.

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Also on the docket are remarks from Dallas Fed President Lorie Logan and her San Francisco counterpart Mary Daly later in the day. Federal Reserve Chairman Jerome Powell will speak on Tuesday.

On the data front, a retail sales figure for March, due at 8:30 a.m. ET, could be crucial in gauging how U.S. consumers are faring in the current high interest rate environment.

U.S. stocks have been selling off lately as investors sharply revised their expectations about how much the Federal Reserve would cut rates this year. Traders have priced in just 42 basis points of cuts this year, compared to about 150 basis points at the start of the year, according to LSEG data.

According to the CME FedWatch Tool, money market participants now see a greater than 50% chance that the central bank will start its easing cycle in July.

At 5:02 a.m. ET, the Dow e-minis were up 124 points, or 0.32%, the S&P 500 e-minis were up 27.25 points, or 0.53%, and the Nasdaq 100 e-minis were up 108, 25 points, or 0.60%.

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Most mega-cap growth stocks moved higher in premarket trading. However, Apple fell 0.7% after data from research firm IDC showed the company’s smartphone sales fell about 10% in the first quarter of 2024.

Salesforce fell 3.5% after a person familiar with the matter told Reuters that the customer relations software maker was in advanced talks to acquire Informatica.

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Pooja Desai)

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