10 things to watch in the stock market Monday including oil prices and Alphabet

Geopolitical tensions in the Middle East, particularly between Israel and Iran, are being closely monitored for their potential impact on oil supplies via the Strait of Hormuz, despite oil prices currently trending down. Domestically, Trump is expanding ICE deportation efforts while pausing enforcement in key industries, and the G7 summit will address the ongoing conflicts in Ukraine and the Middle East. In company-specific news, Honeywell is eyeing European acquisitions to capitalize on increased defense spending, the Justice Department is reviewing Alphabet's $32 billion acquisition of Wiz, and Eli Lilly will offer higher doses of Zepbound via its direct pharmacy for $499 per month; Meta Platforms and Advanced Micro Devices received price target increases from Oppenheimer and Piper Sandler, respectively, while Wells Fargo raised its price target on NXP Semiconductors.

Analysis

Market sentiment appears resilient, with U.S. averages pointing to a higher open despite escalating geopolitical tensions between Israel and Iran, which raise concerns over potential U.S. involvement and the security of oil transit through the Strait of Hormuz; notably, oil prices are currently lower, reflecting a complex market assessment of these risks. The upcoming G7 summit will further scrutinize these conflicts and their trade implications. On the corporate front, Honeywell International (HON, sentiment 0.6) is actively seeking European acquisitions, particularly in safety, thermal management, and electrification systems, to capitalize on increased regional defense spending. Conversely, Alphabet's (GOOGL/GOOG, sentiment -0.3) planned $32 billion acquisition of cybersecurity firm Wiz faces a Justice Department antitrust review, potentially impacting market competition. Eli Lilly (LLY, sentiment 0.5) is expanding access to its obesity drug Zepbound by offering higher doses at $499 per month through direct channels, a move likely aimed at increasing market penetration. Analyst sentiment is positive for several tech firms: Meta Platforms (META, sentiment 0.8) saw its price target increased to $775 by Oppenheimer, citing a better-than-feared macroeconomic and advertising environment. Advanced Micro Devices (AMD, sentiment 0.7) had its price target raised to $140 by Piper Sandler due to new product launches and an anticipated GPU business rebound by FY25. NXP Semiconductors (NXPI, sentiment 0.6) also received a price target hike to $250 from Wells Fargo, following a competitive analysis.

Key Decisions for Investors

• Monitor geopolitical developments in the Middle East closely, as any disruption to the Strait of Hormuz could significantly impact oil prices and broader market stability, despite current price declines.
• Evaluate Honeywell's (HON) growth trajectory considering its strategic focus on European defense and aerospace acquisitions, which could provide a hedge against broader market uncertainties if defense spending increases as anticipated.
• Closely track the Justice Department's antitrust review of Alphabet's (GOOGL/GOOG) Wiz acquisition, as a negative outcome could impact Alphabet's expansion in cybersecurity and signal heightened regulatory scrutiny for large tech M&A.
• Assess the potential market share and revenue impact for Eli Lilly (LLY) from its new pricing and direct availability strategy for higher doses of Zepbound.
• Re-evaluate positions in Meta Platforms (META), Advanced Micro Devices (AMD), and NXP Semiconductors (NXPI) in light of positive analyst revisions, considering if current valuations fully reflect their improved outlooks and competitive strengths.