US stock futures pulled back on Wednesday ahead of the release of a key inflation reading after the US and Iran exchanged strikes, damaging hopes for a Mideast peace plan.
Dow Jones Industrial Average futures (YM=F) slid 0.3%, while those on the broad benchmark S&P 500 (ES=F) fell 0.4%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) declined 0.6%.
In a post on X, US Central Command confirmed forces launched “self-defense” strikes against Iran. Meanwhile, Iranian media reported that Qaeshm Island in the Strait of Hormuz had been attacked with around six explosions, according to Bloomberg.
Tensions between the US and Iran ramped back up after a US Apache helicopter was downed on Monday near the Strait of Hormuz. On Tuesday, President Trump said Iran had attacked the helicopter and vowed a response.
Stocks closed mixed on Tuesday as investors rotated out of the AI trade amid concerns the protracted war with Iran could force the Federal Reserve to hike rates in response to rapidly rising prices.
Investors will get further insight into the dynamic on Wednesday with the release of May’s CPI report. Analysts expect the report to show prices rose again, which would up bets on a rate hike landing this year.
On Wednesday after the bell, Oracle (ORCL) is set to report its earnings results. Investors will pay attention to the details of the company’s cloud business, which counts OpenAI as a customer, amid fluctuations in the AI trade.
The main event of the week lands Friday, with the expected IPO of Elon Musk’s SpaceX (SPCX). The company’s debut is expected to mark the largest public offering in history.
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Gold slides past $4200 as US-Iran hostilities has led to a sell-off
Bloomberg reports:
Gold (GC=F) extended a decline after the US launched strikes against Iran in retaliation for the downing of a military helicopter, jeopardizing efforts to end the war that’s roiled global markets and raised inflation risks.
Bullion fell as much as 2.1% to around $4,173 an ounce on Wednesday, having slid 1.6% in the previous session. American forces struck Iranian sites near the Strait of Hormuz after President Donald Trump blamed Tehran for shooting down a US helicopter off the coast of Oman. Iran’s Mehr news agency reported that several explosions were heard on Qeshm Island and along the country’s southern coast.
The latest clashes threaten a fragile ceasefire and risk extending the near-total closure of Hormuz, a vital transit point for energy shipments from the Middle East to global markets. Iranian Foreign Minister Abbas Araghchi said in a post on X that the country “will leave no attack or threat unanswered” and the Islamic Republic later launched a drone strike on the US Fifth Fleet in Bahrain, state-run IRIB News reported.
Gold is about a fifth below where it was trading before the Iran war broke out at the end of February. The metal’s recent decline through its 200-day moving average — a widely watched measure of long-term momentum — has triggered additional selling as it’s seen as an important level watched by institutional investors.
Oil pulls back from losses as new strikes undo brief US-Iran peace
Bloomberg reports:
Oil rebounded after the US launched fresh strikes against Iran following the downing of an American helicopter, posing a new threat to a fragile truce that’s been tested by recent attacks in the Middle East.
Brent (BZ=F) crude climbed as much as 2% to trade above $93 a barrel, while West Texas Intermediate (CL=F) rallied to $90. Both benchmarks slumped in the previous session. The “self-defense strikes” on Iran were conducted under President Donald Trump’s direction in response to an Apache helicopter being shot down off Oman, US Central Command said in a brief statement.
“The mission is a proportional response to unjustified Iranian aggression,” Centcom said on X. Iran’s state-run IRIB reported that Qeshm Island in the Strait of Hormuz had been struck, with at least six explosions, along with strikes in the Jask region near the narrow waterway.
The fresh US strikes imperil the stability of a shaky ceasefire in the region and negotiations for a more lasting accord between the warring parties. Trump has repeatedly said that peace talks are on track, after a flare-up earlier in the week saw Israel and Iran exchange attacks.