U.S. stock-index futures moved modestly higher on Friday as markets digested fresh developments in the Middle East, incoming trade policy changes from Washington and a batch of technology-sector earnings that includes a better-than-expected report from Intel.
By 03:34 ET (07:34 GMT), Dow futures were up roughly 197 points, or 0.4%; S&P 500 futures had risen about 15 points, or 0.2%; and Nasdaq 100 futures had advanced roughly 23 points, or 0.1%. The gains followed a pullback in equities the previous session after hostilities in the Gulf region intensified and pushed oil prices substantially higher.
The prior-day decline on Wall Street was tied to reports that Iran-backed Houthi militants in Yemen said they had struck Saudi tankers in the Red Sea. Those claims, together with continued tit-for-tat bombardments between the U.S. and Iran, propelled Brent crude futures above $100 a barrel briefly, stoking worries about an energy-driven surge in inflation.
That spike in energy costs has implications beyond commodity markets, with some market participants warning it could exert broader pressure across financial assets and influence central-bank policy. Treasury yields rose as investors priced in those risks, a move that in turn weighed on equity valuations.
"The continued rise in energy prices is starting to put pressure on financial markets more broadly, beyond just the bond market. While central banks continue to take a measured approach to the renewed surge in energy prices, there is still plenty of scope for the turbulence in markets to ratchet higher if the U.S.-Iran conflict continues to escalate," Jonas Goltermann, Chief Markets Economist at Capital Economics, wrote in a note.
U.S. military action and regional shipping threats
Early Friday the U.S. military said it had completed a 13th consecutive night of strikes on Iranian targets, hitting military assets that included drone storage locations and coastal surveillance installations. The stated objective of those strikes was to degrade Tehran’s capacity to target commercial shipping transiting strategic waterways such as the Strait of Hormuz.
At the same time, Iran reportedly rejected a new ceasefire overture carried to Tehran by Iraqi intermediaries. Iran’s top negotiator told local media that problems persisted in what was described as "America’s outlook," according to reporting cited in U.S. media.
Compounding the risk to global trade flows, Houthi forces have said they shut the Bab el-Mandeb Strait and attacked two Saudi tankers in the area, although Saudi authorities confirmed only one strike. The combination of threats to both the Strait of Hormuz and Bab el-Mandeb has tightened perceptions of supply vulnerability and supported a renewed run-up in crude prices.
By 03:13 ET, Brent futures had retreated from their intraday highs, down 1.8% to $98.90 a barrel, but remained well above the roughly $70 level seen after a framework ceasefire deal in June. The recent moves in oil underline how sensitive markets have become to any escalation that could impinge on shipping through key chokepoints.
New round of U.S. tariffs
Separately, the White House announced a package of fresh tariffs affecting imports from 60 countries, replacing an expiring global 10% levy with duties that range from 10% to 12.5%. The administration framed the levies as a response to inadequate enforcement of bans on goods produced with forced labor.
Under the new arrangement, two major trading partners - Canada and the European Union - are subject to 10% tariffs despite having domestic laws that prohibit the importation of forced-labor goods. U.S. officials, according to reporting cited domestically, said those partners had not effectively enforced their rules.
The move follows earlier action in which the president utilized a 10% worldwide tariff after a sweeping set of duties known as the "Liberation Day" measures was struck down by the Supreme Court in February. The administration is now invoking a provision of a 1974 trade act that permits the White House to impose import taxes and sanctions on trading partners deemed to be engaging in unjustifiable or discriminatory trade behavior.
Media reports suggest further tariffs could be proposed in coming weeks, aimed at countering what the administration characterizes as unfair practices in the manufacturing sector.
Intel posts stronger sales, shares rally in extended trading
In corporate news, Intel moved higher in after-hours trading after reporting second-quarter sales that outpaced Wall Street expectations and signaled progress in its turnaround efforts. The chipmaker said sales jumped 25% in the quarter, eclipsing estimates centered around an 11% rise.
Intel also provided a current-quarter revenue outlook in a range between $15.8 billion and $16.8 billion, above consensus forecasts. The company’s chief executive, Lip-Bu Tan, attributed the improvement in part to accelerating demand for compute driven by artificial intelligence, saying AI was "driving unprecedented demand for compute" and positioning Intel for what he described as "sustainable growth."
Intel’s role as a supplier of chips used by advanced AI systems and its status as one of a handful of U.S.-based operators of chip fabrication plants were highlighted as supporting factors for the company. Those attributes also fed into a policy response in Washington, where the U.S. government has taken a stake in the company and officials have stressed the importance of reducing reliance on semiconductor manufacturing in Asia.
Economic calendar and PMI readings
Beyond the geopolitical and corporate headlines, investors will be watching a flash reading of U.S. manufacturing and services activity for July from S&P Global, due Friday. The composite purchasing managers’ index for June stood at 52.2, buoyed by a jump in services activity that market observers linked to the FIFA World Cup, which was jointly hosted by the U.S., Canada and Mexico.
A reading above 50 signals expansion. Manufacturing activity also rose for a fourth straight month in June, as businesses reportedly sought to bolster supply buffers against the twin risks of shortages and elevated prices tied to the Iran conflict.
Implications for markets
The confluence of renewed Middle East hostilities, a White House trade move that broadens import levies and corporate news from large technology firms creates a layering of risks and catalysts. Energy-market volatility has already translated into higher bond yields, pressuring equity markets; trade measures and tariff uncertainty may introduce further frictions for multinational supply chains; and earnings from heavyweight chipmakers could help determine sector leadership as the AI-driven demand cycle unfolds.
For now, futures gains suggest some measured optimism at the market open, but the underlying drivers remain fluid: military actions and shipping-lane disruptions can change quickly, and policy moves on trade are likely to reverberate through corporate cost structures and international flows.
What to watch next
- Any new developments in U.S.-Iran exchanges or Houthi attacks that affect shipping through the Strait of Hormuz or Bab el-Mandeb.
- Oil-price reactions and their knock-on effects on inflation expectations and Treasury yields.
- Further announcements from the White House on tariffs and any follow-up measures targeting manufacturing trade.
- Quarterly earnings from major technology companies, where AI-related demand narratives could drive reallocation within equity markets.
- The flash S&P Global PMI for July for additional color on growth momentum in manufacturing and services.