U.S. equity futures traded lower ahead of Wednesday’s opening bell, pointing to another weak session after renewed geopolitical tensions triggered fresh risk aversion across financial markets.
Investor sentiment deteriorated after President Donald Trump said the U.S.-Iran ceasefire was “over,” raising concerns that the conflict in the Middle East could intensify once again.
“As far as I’m concerned, it’s over,” Trump told reporters at the NATO summit in Ankara, Turkey, calling negotiations with Iran a “waste of time.”
The announcement pushed oil prices sharply higher, with U.S. crude futures jumping by more than 4%.
The spike in energy prices has renewed worries about inflationary pressures and the direction of interest rates ahead of the release of the minutes from the Federal Reserve’s June policy meeting.
Trump’s comments followed an announcement from U.S. Central Command confirming that more than 80 targets in Iran had been struck during a fresh military operation launched in response to Iran’s latest attacks on commercial vessels transiting the Strait of Hormuz.
Iran’s Revolutionary Guards claimed they targeted U.S. military sites in Bahrain and Kuwait hours after the U.S. strikes.
Tuesday’s session saw stocks recover from early losses for a time before selling resumed in the afternoon, leaving all three major indexes in negative territory by the close.
The Nasdaq led the declines, reflecting broad weakness in technology shares.
The Nasdaq fell 302.47 points, or 1.2%, to 25,818.69. The S&P 500 declined 33.58 points, or 0.5%, to 7,503.85, while the Dow Jones Industrial Average lost 130.76 points, or 0.3%, to 52,925.15.
Semiconductor companies suffered particularly heavy losses, sending the Philadelphia Semiconductor Index down 4.7%.
The sell-off accelerated after South Korean chipmaker Samsung Electronics (USOTC:SSNHZ) dropped nearly 7%.
Although Samsung reported second-quarter profit that was 19 times higher than a year earlier, investors remained cautious about AI-related investment levels and future demand.
“Although Samsung’s results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it’s a bubble waiting to burst,” said Dan Coatsworth, head of markets at AJ Bell.
Chip stocks also weakened after Reuters reported that Chinese startup DeepSeek is developing its own AI processor.
Networking companies also posted steep declines, pulling the NYSE Arca Networking Index down 3.7%.
Gold miners, airlines and computer hardware manufacturers also ended the session lower, while energy, pharmaceutical and healthcare shares outperformed.
Energy stocks gained as oil prices surged, although higher crude prices contributed to broader concerns across equity markets.
U.S. crude futures rallied following reports of projectile attacks against several commercial vessels travelling through the Strait of Hormuz.
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