US stock futures saw a decline on Tuesday, following a notable rebound on Wall Street that was largely fueled by newfound optimism regarding easing tensions between Washington and Tehran. Contracts linked to the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 futures all recorded a drop of 0.3%.
In the oil market, prices initially fell due to reduced fears of hostilities escalating but later rebounded as fighting persisted between Iran and the US-Israeli alliance. West Texas Intermediate crude saw an increase of 2%, surpassing $90 a barrel, while Brent crude also ascended, moving back above $101.
The market had experienced a surge on Monday when President Trump characterized discussions with Iran as “very good and productive,” raising hopes for a resolution to ongoing hostilities. However, this optimism was somewhat dampened after Iranian state media countered the assertion, stating that no direct negotiations had occurred. Tensions had escalated over the weekend, with Trump warning of potential strikes on Iranian energy infrastructure should the Strait of Hormuz remain closed, to which Iran responded with threats against US assets.
Investors are now turning their attention to upcoming US manufacturing data due on Tuesday morning, alongside the conclusion of earnings season, highlighted by GameStop’s imminent report post-market closure.
In a key development for the tech sector, ongoing conflict in the Middle East has complicated ambitions for significant data center build-outs in the region. Amazon Web Services reported disruptions in its Bahrain region due to drone activity, marking the second instance of such interruptions since the war commenced. The situation has raised questions about the feasibility of Big Tech’s plans to establish the Middle East as a vital regional hub for data services.
Smithfield Foods’ stock gained a notable 4% in premarket trading after the company’s board raised the quarterly dividend by 25%. Gilead Sciences also experienced a slight uptick following an agreement to acquire biotech firm Ouro Medicines. Conversely, shares of Apollo Global Management declined by 2% after its private credit fund implemented a 5% cap on withdrawals.
Jefferies Financial Group enjoyed a significant rise of 9% in premarket trading after reports emerged that Japan’s Sumitomo Mitsui Financial Group is contemplating a possible acquisition of the US investment bank.
In the beauty sector, Puig’s stock rose 8% after Estée Lauder confirmed ongoing acquisition discussions for the Spanish beauty group associated with Charlotte Tilbury.
With ongoing unrest in Iran, gold prices have continued to decline for the tenth consecutive day, reflecting investor sentiments amid fears that the conflict may expand regionally. Simultaneously, oil prices were climbing in response to concerns that the situation could further destabilize neighboring nations.
