Market Hopium as Iran Lifts Equity Futures: 8 Key Items Shaping the Stock Market Monday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive start to the trading week.

1. Iran’s Revolutionary Guards said on Monday they had struck U.S. military assets across the Middle East after another night of U.S. bombardment of Iranian cities, part of a ‌cycle of attacks that has all but wrecked an interim ceasefire agreement. Oil prices briefly jumped above $90 a barrel after renewed disruption to shipping through the Strait of Hormuz… (Reuters)

Oil prices reversed early gains on Monday after Iran’s foreign ‌ministry said negotiations with the U.S. could be pursued based on national interests. (Reuters)

Renewed escalations between the U.S. and Iran eroded the market’s expectation that the crisis in the Middle East was ending and energy prices would normalize. While equity futures turned up on Monday morning on reports that peace talks could resume between the U.S. and Iran, traffic in the Strait of Hormuz remains at a near standstill. We’ve seen the impact on market hopium before and, given the challenges between U.S and Iran peace talks, we’ll continue to focus on the volume of traffic through the strait and what that could mean for energy prices and supply chain issues.

2. An acceleration in the Federal Reserve’s preferred measure of inflation has some officials warning that higher interest rates might be in order. A bit of relief, though, is on its way — not from prices themselves, but the way they are measured… The effect, according to economists, will be to lower core PCE inflation… Economists estimate that when the revised approach is rolled out in the August data set to be published Sept. 30, core PCE inflation will be about two-tenths of a percentage point lower than under the old formula. (WSJ)

You may be shaking your head, thinking “interesting timing,” and we’d be right there with you. To be fair, though, this revised approach has been telegraphed and while we’re a wee bit skeptical, we’ll look to see the nuts and bolts before rendering final judgement.

At the same time, we recognize there can be differences between published economic data and what the consumer is feeling. For example, despite the softer-than-expected June CPI and PPI figures, on Monday morning, Domino’s Pizza (DPZ) reported U.S. comp sales growth that fell to its slowest pace in five quarters. The read through is that consumers continue to pull back on dining out. The company’s Q2 2026 same store sales rose 0.1% for its U.S. operations. While that matched analyst estimates, it’s well below those for other quick service restaurants like McDonald’s (MCD) and Chipotle (CMG).

The question we’re pondering is whether this is a shift by consumers or if expectations for other quick service restaurants are too high.

3. Retail investors are in love with leverage. In June, margin debt hit a record high of $1.5 trillion, up 49% from a year ago, according to the Financial Industry Regulatory Authority. Experts say that the rise in leverage is amplifying volatility in retail-favorite stocks and heightening the risk of forced selloffs… A Dot-Com era rule previously restricted margin access for high-frequency traders to those with account balances of $25,000 or more. Last month, a new margin framework replaced the 25-year-old pattern day trader rule. Under the new intraday margin rule, retail traders can now execute unlimited day trades on margin with account balances as low as $2,000, granting smaller, less capitalized accounts greater access to leverage. (Barron’s)

Last week we discussed the impact leveraged ETFs were having on market volatility, and these new findings show there is more to it. With the Nasdaq Composite hitting an all-time high on May 28 and the S&P 500 doing the same on June 2, with the benefit of some hindsight, we are not surprised by the combination of FOMO and the herd mentality driving some retail investors that may be late to the market.

This change in margin rules along with the inflows to leveraged ETFs mean we will want to tread even more carefully, and it may call for us to zig when the herd is zagging. But let’s also remember that volatility can bring opportunities if we’re prepared. Earlier this month, we rebuilt the Portfolio’s cash position, our intention is to use the market volatility to put it to work at better prices compared to those in June, and perhaps April or May.

5. AerCap Holdings NV is in discussions to buy Boeing Co. 787 Dreamliner aircraft, people familiar with the matter said, potentially adding to a slate of leasing-company deals at the upcoming Farnborough International Airshow. (Bloomberg)

Boeing Co. locked down a major order from leasing company SMBC Aviation Capital, the first standout deal at the Farnborough International Airshow. SMBC will buy 100 737 Max sjets, including 60 of the larger Max 10 variant and 40 Max 8s, the company’s announced Monday. (Bloomberg)

The Farnborough Airshow kicked off on Monday, and as we’ve discussed previously, it has the potential to be a catalyst for the Portfolio’s position in Boeing (BA) shares. Usually, the focus is on new orders, and while we will want to see Boeing garner its fair share, given its multi-year backlog, we’ll be as focused on what the company may say about increasing 737 widebody 787 production rates. Winning orders is a good thing, but our play with Boeing remains one centered on rising production rates and the benefit of incremental operating leverage on its bottom line.

5. Morgan Stanley has emerged as Wall Street’s chief architect of the financing structures underpinning the AI boom, devising new debt and equity models that are funnelling tens of billions of dollars into the massive build-out of data centres. According to industry executives, the bank has become the dominant adviser putting together the biggest and most inventive AI infrastructure financings since last year. This includes a $3.2bn bond for data centre developer TeraWulf backed by Google, a $27bn debt package for Meta’s Hyperion data centre tie-up with Blue Owl and, more recently, advising Broadcom on a $35bn chip financing deal. (FT)

The above reaffirms our stance for Morgan Stanley (MS ) shares in the Portfolio as it reinforces that there is more going on with investment banking than just the IPO market. That’s not to discount the IPO market and its prospects, but it would be a mistake to only focus on that part of the investment banking stool at a time when activity for capital raising and M&A are robust. When Morgan reported its Q2 2026 results, we shared that based on subsequent investment banking activity we would review our $225 target. That plan remains in place.

6. White House border czar Tom Homan said on Sunday, “I think body cameras are the way to go,” after fatal shootings by federal officers in Texas and Maine earlier this month. “I think body cameras let the American people know what that officer sees when he takes that action,” Homan said on “Face the Nation with Margaret Brennan”… last week, the Department of Homeland Security announced that every Immigration and Customs Enforcement arrest team will have at least one officer equipped with a camera going forward. DHS said shortly after the Houston shooting that body cameras had been deployed to more than half of ICE’s field offices, with the remaining offices set to receive them within 60 days. (CBS News)

We will add the above to the growing number of data points about AI adoption in public safety markets that are grappling with police shortages. While the Portfolio trimmed back its exposure to Axon (AXON) in early June near $627, given the current share price, the shares are back on our shopping radar.

7. Economic data today per TipRanks: Leading Economic Index (June).

8. Companies reporting today per TipRanks: AM – AMC Entertainment (AMC), Domino’s Pizza (DPZ). PM – Calix Networks (CALX), Crown Castle (CCK), Steel Dynamics (STLD).

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At the time of publication, TheStreet Pro Portfolio was long AXON, BA and MS.