U.S. Futures Slip as Renewed U.S.-Iran Strikes Shake Market Sentiment: Dow Jones, S&P, Nasdaq, Wall Street
wall street flag NEW SIZE ©dflorian1980
U.S. equity futures traded lower on Thursday while oil prices climbed after a fresh exchange of military strikes between the United States and Iran undermined hopes for a near-term peace agreement. Investors were also preparing for the release of a closely watched U.S. inflation report expected later in the session.
At 03:37 ET, Dow Jones futures were down 53 points, or 0.1%. S&P 500 futures fell 11 points, also down 0.1%, while Nasdaq 100 futures dropped 99 points, or 0.3%.
The decline followed a mixed session on Wall Street the previous day, where major indices finished slightly higher amid cautious optimism that diplomatic negotiations between Washington and Tehran could still advance.
Analysts at Vital Knowledge said investors continue to believe a deal to end the conflict may emerge in the coming days. However, market confidence was dented after the White House dismissed as “a complete fabrication” a purported Memorandum of Understanding draft circulated by Iranian state television.
Consumer Stocks Supported as Energy Shares Ease
Market sentiment had earlier been helped by falling Brent crude prices and stronger-than-expected earnings from retailers including Abercrombie & Fitch and Bath & Body Works.
According to analysts at Vital Knowledge, those factors, combined with “sanguine” corporate commentary during a closely watched industry conference, helped drive gains in consumer discretionary stocks.
At the same time, energy-related shares faced some pressure, while investors took profits in several technology stocks that had recently posted strong rallies.
New Military Strikes Raise Concerns Over Ceasefire Stability
Tensions in the Gulf escalated again after reports that the U.S. military launched additional strikes inside Iran on Wednesday in response to Iranian drone attacks targeting commercial vessels in the Strait of Hormuz.
The Wall Street Journal, citing officials familiar with the matter, reported that U.S. forces destroyed a drone and targeted a drone-control facility near the Iranian port city of Bandar Abbas.
A U.S. official told Reuters the operations were “measured, purely defensive and intended to maintain” the fragile ceasefire currently in place.
Iran’s Islamic Revolutionary Guard Corps later stated that it had attacked a U.S. military base and warned that any future strikes would prompt retaliation.
Meanwhile, Kuwait’s military said it intercepted missile and drone attacks, ending a period of relative calm that had lasted several weeks.
Oil Prices Move Higher as Supply Risks Persist
Diplomatic talks aimed at ending the conflict continued but failed to deliver an immediate breakthrough, with negotiations still complicated by disagreements surrounding Iran’s nuclear programme and tensions over the Strait of Hormuz.
Against this backdrop, Brent crude futures rose 2.8% to $96.95 per barrel. Although prices remained below the key $100 threshold, they continued trading significantly above pre-conflict levels.
The disruption around the Strait of Hormuz has intensified concerns over global energy supplies, contributing to higher oil prices and raising fears of renewed inflationary pressures worldwide. Roughly 20% of global oil and liquefied natural gas shipments pass through the strategic waterway.
Markets Await Key U.S. Inflation Data
Investor attention is also turning toward the release of the U.S. personal consumption expenditures (PCE) price index for April, one of the Federal Reserve’s preferred inflation measures.
Economists expect headline annual PCE inflation to accelerate to 3.8% from 3.5%, while the monthly figure is forecast to slow to 0.5% from 0.7%.
Core PCE inflation, which excludes food and energy prices, is projected to rise slightly to 3.3% year-on-year and remain unchanged month-on-month at 0.3%.
Recent commentary from Federal Reserve officials has highlighted growing debate within the central bank over the future direction of interest rates, particularly as policymakers assess the inflationary impact of rising energy prices.
Market expectations have increasingly shifted toward the possibility that the Fed and other central banks may need to resume interest rate increases if inflation pressures persist.
Musk Clarifies Terms of SpaceX-Anthropic Computing Agreement
Separately, Elon Musk said Thursday evening that SpaceX’s agreement to provide computing power to artificial intelligence startup Anthropic is currently structured as a short-term arrangement rather than a long-term commitment.
Earlier disclosures from SpaceX had indicated the agreement would provide Anthropic with access to computing resources at the Colossus data center through May 2029.
Responding to comments on social media, Musk stated that “SpaceX has not committed to leasing Colossus for years, although it’s possible that may be what happens.”
He added that the current agreement consists of a 180-day lease with a 90-day mutual cancellation option thereafter. According to Musk, SpaceX requested the shorter structure to preserve flexibility in case the company requires additional internal computing capacity in the future.
Get stock prices from InvestorsHub
