U.S. stock futures moved lower early Monday after Donald Trump scrapped plans to dispatch negotiators for renewed discussions with Iran, extending the standoff between Washington and Tehran. The ongoing closure of the Strait of Hormuz continues to support higher oil prices. Meanwhile, Verizon Communications Inc. (NYSE:VZ) is set to kick off a busy week of corporate earnings, including updates from major artificial intelligence players.
Futures slip
As of 03:30 ET, Dow futures were down 86 points, or 0.2%, while S&P 500 futures dipped 0.1% and Nasdaq 100 futures also declined by 0.1%. Markets are bracing for a packed week featuring a wave of earnings releases, key central bank decisions, and any developments tied to U.S.-Iran relations.
Major indices had ended last week on a stronger note, supported by expectations that talks between the U.S. and Iran could resume and potentially lead to the reopening of the Strait of Hormuz. However, sentiment shifted after Trump cancelled the planned negotiations in Pakistan, signalling that the disruption to the key oil transit route may persist. He added that Tehran can “call me” because Washington holds “all the cards.”
Oil rises amid ongoing tensions
Uncertainty around the next phase of diplomacy remains a central focus for investors. Analysts at Vital Knowledge said that “there will probably be a million more Iran headlines” for markets to digest in the coming days.
According to Axios, Iran has presented a new proposal to the United States aimed at reopening the Strait of Hormuz, ending hostilities, and postponing nuclear negotiations. Despite this, supply flows through the passage remain constrained, pushing oil prices higher.
Brent crude futures rose 2.4% to $107.87 per barrel, while West Texas Intermediate futures climbed 2.3% to $96.58 per barrel.
Verizon to lead earnings wave
The earnings season begins in earnest with Verizon Communications Inc. (NYSE:VZ), which is due to report ahead of the market open. Consensus estimates compiled by Bloomberg suggest a decline of 89,169 retail postpaid subscribers. Adjusted EBITDA is forecast at $13.14 billion on revenue of $34.8 billion.
Investors will be watching Verizon’s efforts to integrate its wireless and broadband offerings to drive subscriber growth, particularly following the expansion of its fiber footprint through the acquisition of Frontier Communications.
In January, Verizon issued a positive outlook for full-year earnings and free cash flow, and announced its first share buyback programme in nearly six years.
The week will also bring results from major technology names such as Alphabet and Microsoft, with markets closely focused on updates regarding their significant investments in artificial intelligence, seen as crucial to sustaining growth in the sector.
Budget airlines seek government support
A group of U.S. low-cost airlines, including Frontier and Avelo, is seeking $2.5 billion in government assistance in exchange for warrants that could convert into equity, according to a report by The Wall Street Journal.
The figure reflects higher anticipated fuel costs, with projections assuming jet fuel prices will average above $4 per gallon for the remainder of the year. Discussions over a potential aid package are expected to continue in the coming days.
Airlines globally have been under pressure from rising fuel costs, driven by supply disruptions linked to geopolitical tensions involving Iran.
Bank of Japan decision in focus
Attention is also turning to the upcoming policy decision from the Bank of Japan, which is widely expected to leave interest rates unchanged following its April 28 meeting.
The central bank is projected to hold its benchmark rate at 0.75%, marking a third consecutive pause after a rate increase in December. While markets had previously expected another hike, recent signals from policymakers have pointed to a more cautious stance.
Uncertainty surrounding the Iran conflict and its economic implications may encourage the Bank of Japan to adopt a wait-and-see approach, although it is still expected to maintain a relatively hawkish outlook and potentially raise inflation forecasts amid higher energy and shipping costs.
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