U.S. stock index futures moved into negative territory late Wednesday after a sharp increase in oil prices revived worries about the inflationary consequences of the ongoing Iran conflict.
Futures reversed earlier gains and slipped lower following a positive session on Wall Street, where strong economic data and reports suggesting Iran was open to renewed dialogue had briefly improved risk sentiment.
However, Tehran largely denied that it had sought further talks with Washington, pushing oil prices sharply higher during the Asian trading session on Thursday. Brent and WTI futures jumped between 3% and 4%.
S&P 500 Futures dropped 0.16% to 6,869.50 points by 23:43 ET. Nasdaq 100 Futures declined 0.16% to 25,085.75 points, while Dow Jones Futures fell 0.3% to 48,649.0 points.
Oil prices surge as Iran conflict rages on
Oil prices rose sharply in Asian trading on Thursday after Iran launched a barrage of missiles toward Israel, marking the sixth straight day of hostilities in the Middle East.
The strike came only hours after the U.S. Senate rejected a motion intended to limit President Donald Trump’s authority to conduct military strikes against Iran.
Inflation driven by energy prices has been a central concern surrounding the Iran conflict, particularly after military activity in the Strait of Hormuz disrupted oil flows supplying a significant portion of the global market, pushing commodity prices higher.
These developments have heightened fears that a prolonged conflict could keep energy prices elevated, fueling inflation and prompting a more hawkish response from major central banks around the world.
Oil’s sharp move higher on Thursday also followed comments from Iranian officials denying they had contacted Washington to discuss de-escalation.
Broadcom rises on strong AI-fueled outlook
Broadcom Inc. (NASDAQ:AVGO) rose more than 5% in after-hours trading after reporting fiscal first-quarter results that topped expectations for both revenue and earnings.
The company also projected second-quarter revenue of $22 billion, exceeding forecasts of $20.4 billion, with nearly half expected to come from sales of its advanced AI chips.
Broadcom’s results boosted confidence that the AI investment theme remains strong, particularly for semiconductor manufacturers positioned to benefit from the sector’s rapid expansion.
Rival NVIDIA Corporation (NASDAQ:NVDA) rose 0.3% in after-hours trading. The company’s CEO, Jensen Huang, said earlier Wednesday that AI-driven demand for chips was “higher than very high.”
Software company CrowdStrike Holdings Inc. (NASDAQ:CRWD) climbed more than 4% on Wednesday after posting quarterly earnings that exceeded expectations, helping ease concerns about AI-related disruption within the enterprise software sector.
Wall St aided by strong data
Wall Street indexes closed higher on Wednesday, partly supported by stronger-than-expected private payrolls data for February, indicating continued growth in the labor market.
Separately, the services sector purchasing managers’ index released by the Institute for Supply Management climbed to its highest level in more than three years in February, pointing to solid domestic demand. In addition, the Federal Reserve’s Beige Book report suggested the central bank remains broadly optimistic about the economic outlook.
These releases come ahead of Challenger job cuts data scheduled for Thursday and the closely watched nonfarm payrolls report due Friday. The latter will be scrutinized for further signals on the direction of interest rates.
The S&P 500 gained 0.8% on Wednesday, the NASDAQ Composite advanced 1.3%, while the Dow Jones Industrial Average rose 0.5%.
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