MARKET SNAPSHOT

U.S. stock indexes rallied and oil futures sank after Iran retaliated in a limited fashion against the United States. Treasury yields fell after Federal Reserve governor Michelle Bowman said she could support a July interest-rate cut. Gold futures settled slightly higher as uncertainty around developments in the Middle East led to cautious trading. The dollar gave up gains after mild indicators and dovish Fedspeak.

MARKET WRAPS

EQUITIES

Stocks climbed after Iran retaliated in a limited fashion against the U.S. by launching missiles at an American military base in Qatar and at Iraq, with no casualties reported.

The S&P 500 rose just under 1%, while both the Dow Jones Industrial Average and the tech-heavy Nasdaq Composite advanced 0.9%.

President Trump's decision to bomb Iran had raised fears that Tehran might retaliate by attacking critical energy infrastructure.

"The retaliation seems to be very measured," said Jason Pride, chief of investment strategy and research at Glenmede. While the situation could change quickly, he added, Iran's missile salvo seemed "very coordinated and intended to make it appear that Iran is not escalating."

Earlier Monday, stock investors in Asia took the Middle East tensions in stride.

China's benchmark Shanghai Composite Index ended 0.6% higher. The Shenzhen Composite Index rose 0.9%, and the ChiNext Price Index gained 0.4%. Hong Kong's Hang Seng Index rose 0.7%.

Japan's Nikkei Stock Average declined 0.1%.

Stocks in Australia slipped, as the S&P/ASX 200 dropped 0.4%.

In New Zealand, the S&P/NZX 50 Index fell 0.3%.

COMMODITIES

Crude futures sank as Iran's firing of missiles at a U.S. military base in Qatar was seen as a measured response to U.S. strikes on its nuclear facilities.

The U.S. military intercepted the missiles and no casualties were reported. It also eased concerns that Iran could move to blockade the Strait of Hormuz, affecting a large part of the world's oil shipments.

"Tehran is likely weighing its options carefully, given its own reliance on the strait for oil exports and the risk of provoking further U.S. or Israeli military action," Alex Hodes of StoneX said.

WTI and Brent settled down 7.2% at $68.51 and $71.48 a barrel, respectively.

The uncertainty around developments in the Middle East did not move gold in a big way.

"There was limited panic-driven safe-haven inflows," said Dilin Wu of Pepperstone. "This reflects a cautious tone in the market, with traders appearing to take a wait-and-see approach to the evolving news flow."

Investors question if the facts surrounding the U.S. strike hitting Iranian targets over the weekend and now Iran's retaliation suggest that no side is truly agitating for a war and that a ceasefire is coming soon.

Front-month gold rose 0.3% to $3,377.70 a troy ounce.

TODAY'S TOP HEADLINES

Another Fed Official Says a July Rate Cut Could Be in the Cards

Federal Reserve Vice Chair for Supervision Michelle Bowman said Monday she would support cutting interest rates as soon as July if inflation pressures continue to ease or if signs of labor market weakness intensify.

"As we think about the path forward, it is time to consider adjusting the policy rate," Bowman said at a conference in Prague. "Should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market."

Fed Governor Christopher Waller last week also suggested a July cut is on the table if inflation data continues to improve. "We could do this as early as July," he said in a Friday interview with CNBC.

Israel Seeks to Wrap Up Fighting With Iran

JERUSALEM-Israel is looking to wrap up its war with Iran soon, Israeli and Arab officials said, capitalizing on the unprecedented U.S. attack on key Iranian nuclear sites to accelerate an end to the fighting that is stretching its troops, munitions and coffers.

Israel expects to complete strikes on its list of top military targets in Iran in the coming days, which Israeli officials said would provide a window to stop the fighting. The officials said they didn't expect a retaliatory attack Monday by Iran on a U.S.-run military base to change their calculus.

Iran launched 14 missiles-mirroring the number of U.S. bombs dropped in Iran-at the Al Udeid Air Base in Qatar after sending prior warning to authorities in Doha, a limited strike that appeared aimed at avoiding further escalation. There were no U.S. casualties, Qatar said.

Home Sales Rose in May, but Housing Market Is Still Sluggish

Sales of existing homes rose slightly in May but held near historically low levels, the latest sign that buyers are staying away because of high home prices.

U.S. existing-home sales rose 0.8% in May from the prior month, the National Association of Realtors said Monday.

Sales were better than expected. Economists surveyed by The Wall Street Journal had estimated a monthly decrease of 1.3%. But they were still subdued, coming in at a seasonally adjusted annual rate of 4.03 million. That was the slowest sales pace for any May since 2009.

Ford Still Scrambling to Get Rare-Earth Magnets

Ford Motor still faces difficulties obtaining vital magnets made with rare-earth elements, despite a deal the U.S. struck with China to ease export controls, a company executive said Monday.

"It's hand to mouth-the normal supply-chain scrambling that you have to do," said Lisa Drake, a vice president overseeing Ford's industrial planning for batteries and electric vehicles.

Ford in May stopped production at a vehicle factory in the Chicago area because of a magnet shortage. The situation has improved, but the company still needs to "move things around" to avoid manufacturing shutdowns given the scarcity of the materials, Drake told reporters during a briefing at an EV battery plant the company is building in Michigan.

Hims & Hers Stock Drops More Than 30% After Novo Nordisk Breakup

Novo Nordisk abruptly ended its partnership with Hims & Hers after the Danish drugmaker accused the telehealth company of illegally selling cheaper copycats of Novo Nordisk's weight-loss drug and engaging in deceptive marketing.

The pharmaceutical giant said on Monday that it had concerns about the safety of knockoff versions of Wegovy, and that Hims & Hers' deceptive marketing of such knockoffs put patient safety at risk.

In turn, Hims & Hers accused Novo Nordisk of pressuring it to steer patients to Wegovy regardless of whether it was the best option for patients.