TLDR
- US stock futures fell Thursday after Wednesday’s rebound, with Dow, S&P 500, and Nasdaq all slipping in premarket trading.
- Middle East conflict between the US, Israel, and Iran entered its sixth day with no clear end in sight.
- Iran denied reaching out to the US for ceasefire talks, contradicting earlier reports that boosted markets Wednesday.
- Oil prices rose again, with Brent crude above $83 a barrel and WTI near $76, as Strait of Hormuz shipping fears grow.
- Gold, the dollar, and Treasury yields all rose as investors moved toward safer assets.
US stock futures fell on Thursday morning after a solid rally the day before. The Dow, S&P 500, and Nasdaq 100 all slipped in premarket trading as investors weighed fresh developments in the Middle East conflict.
Wednesday’s session had been strong. The Dow snapped a three-day losing streak, and both the S&P 500 and Nasdaq Composite closed with gains. Markets got a boost from strong economic data and reports that Iran had quietly reached out to the US to signal it was open to ceasefire talks.
But those hopes faded fast. An Iranian official told state media that “no message has been sent from Iran to the US,” and that Iran would not respond to American outreach. The denial cooled sentiment heading into Thursday.
The conflict between the US, Israel, and Iran entered its sixth day with no signs of slowing down. Trump said on Wednesday the US was “doing very well on the war front.” The White House said American forces had struck more than 2,000 targets and were pushing toward “complete and total control of Iranian airspace.”
Oil Prices Back on the Rise
Oil prices steadied after an earlier surge, then climbed again overnight. Brent crude rose 2.1% to $83.12 a barrel. West Texas Intermediate climbed 2.6% to $76.62 a barrel.
The main concern is the Strait of Hormuz. It’s one of the world’s most important shipping corridors for oil tankers. Iran is the fourth-largest oil producer in OPEC, and any disruption to supply through that route could push prices higher.
Trump said the US would offer risk insurance and naval escorts for ships passing through the strait. That helped ease some supply fears earlier in the week but did not stop prices from rising again.
Deutsche Bank analyst Henry Allen noted that “both the US and Iran have made clear they aren’t backing down,” adding that oil prices were “moving up again overnight.”
Markets Watch Jobs Data and Earnings
Rising oil prices are raising concerns about inflation. Higher energy costs could force the Federal Reserve to rethink interest rate cuts. The yield on the 10-year Treasury note climbed to a three-week high of 4.12%.
Gold rose 0.8% to $5,176 an ounce as investors sought safe-haven assets. The US dollar also gained 0.2% against a basket of currencies.
Initial jobless claims are due Thursday. Friday’s nonfarm payrolls report is seen as a key signal for when the Fed might start cutting rates.
Earnings results from Costco and Marvell Technology are due after markets close Thursday.
The Cboe Volatility Index, known as the VIX, stood at just over 21, implying traders expect daily S&P 500 swings of about 1.3% over the next 30 days.
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