U.S. equity futures are indicating a firmer open on Tuesday, pointing to a potential recovery after stocks came under pressure in the previous session.
The improved tone is being driven in part by a sharp drop in oil prices. U.S. crude futures are down more than 3% after surging over 4% on Monday, easing some of the inflation and cost concerns that had weighed on sentiment.
This pullback comes even as geopolitical risks in the Middle East remain elevated.
Speaking to Fox News on Monday, President Donald Trump warned that Iran would be “blown off the face of the earth” if it targeted U.S. vessels protecting commercial shipping through the Strait of Hormuz.
Meanwhile, Secretary of War Pete Hegseth said on Tuesday that “two U.S. commercial ships, along with American destroyers, have already safely transited the strait, showing the lane is clear.”
Earnings Provide Additional Support
Investor sentiment is also getting a lift from encouraging corporate updates. Shares of Anheuser-Busch InBev (NYSE:BUD) surged 6.6% in premarket trading after reporting first-quarter results that topped expectations on both revenue and profit.
Pfizer Inc. (NYSE:PFE) is also trading higher ahead of the open after delivering stronger-than-expected quarterly numbers.
Previous Session Ended Lower
On Monday, markets struggled to find direction early on before drifting lower through the session. All major indices closed in the red, with the Dow posting the steepest decline.
The Dow Jones Industrial Average fell 557.37 points, or 1.1%, to 48,941.90. The S&P 500 Index dropped 29.37 points, or 0.4%, to 7,200.75, while the Nasdaq Composite slipped 46.64 points, or 0.2%, to 25,067.80.
The selloff coincided with a spike in crude prices, which climbed more than 4% during the session.
Middle East Developments Drive Oil Volatility
Oil prices surged after the United Arab Emirates’ Defense Ministry reported that four cruise missiles launched from Iran had been detected heading toward different areas of the country.
“Three were successfully engaged over the country’s territorial waters, while one fell in the sea,” the ministry said. “The Ministry of Defense affirmed that the sounds heard in different parts of the country are a result of air defence systems engaging threats.”
Concerns intensified following a Reuters report of a fire breaking out in a key oil zone in the UAE after a drone strike attributed to Iran.
Over the weekend, President Donald Trump said he would review a new peace proposal from Iran, though he added he “can’t imagine that it would be acceptable.”
“They have not yet paid a big enough price for what they have done to Humanity, and the World, over the last 47 years,” Trump wrote on Truth Social.
In a separate message, Trump said the U.S. would soon begin helping to “free” vessels from countries not involved in the conflict that are stranded due to the closure of the Strait of Hormuz.
“If, in any way, this Humanitarian process is interfered with, that interference will, unfortunately, have to be dealt with forcefully,” he warned.
These developments come amid reports that Iran’s navy has blocked what it described as “American-Zionist” warships from entering the strait.
Iranian state media also claimed that the Islamic Revolutionary Guard Corps struck a U.S. naval vessel with two missiles, although U.S. Central Command denied this, stating, “No U.S. Navy ships have been struck.”
Sector Moves
Transportation stocks were among the hardest hit, with the Dow Jones Transportation Average dropping 4.8%.
Housing-related shares also weakened notably, as the Philadelphia Housing Sector Index fell 3.4%.
Banking, steel, and gold stocks were also under pressure, while oil producers and biotech names delivered stronger performances during the session.
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