U.S. equity futures opened lower on Thursday as traders digested a stream of reports from the Middle East that combined cautious diplomatic hope with continued military activity.
At 07:36 ET (11:36 GMT), the Dow futures contract was down 351 points, or 0.8%. S&P 500 futures had eased 53 points, also 0.8% lower, and Nasdaq 100 futures were lower by 230 points, a 0.9% decline.
Stocks on Wall Street had advanced in the prior session after reports suggested the U.S. and Iran might be open to talks to end the nearly month-long conflict. Those reports said Tehran had privately signaled a willingness to engage in discussions with Washington, and that U.S. Vice President JD Vance could be prepared to travel to Pakistan for negotiations as soon as this weekend.
Additional coverage from the Wall Street Journal suggested Washington and Jerusalem might delay attempts to target Iran's foreign minister or the speaker of its parliament while communications continue. Still, the overall tenor of messages from both sides remained inconsistent.
Officials and media accounts indicated the parties are far apart on the conditions required to stop hostilities. At the same time, the Pentagon has been moving to position more ground troops in the Middle East, a development that signals ongoing military escalation even amid talk of diplomacy.
President Donald Trump commented on the state of negotiations and Iran's posture in a social media post early Thursday, calling Iranian negotiators "very different and 'strange,'" and asserting that Tehran was "begging" for a deal to end the conflict. He reiterated recent White House assessments that Tehran's military capacity had been "obliterated" by joint U.S.-Israeli strikes and warned: "They better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won’t be pretty!"
Against the backdrop of mixed messages, oil prices climbed, with traders continuing to weigh the implications of conflict-driven supply disruption. Brent crude futures for the May contract rose 5.0% to $107.37 a barrel, while U.S. West Texas Intermediate futures gained 4.9% to $94.73 a barrel, pushing both benchmarks back above the $100 a barrel threshold for global attention.
Market participants have repeatedly expressed concern that an energy shock of this magnitude could rekindle inflationary pressures globally, possibly prompting central banks to consider additional interest rate moves. The Organisation for Economic Co-operation and Development warned that further surges in energy prices stemming from a protracted conflict would accelerate price gains and set back economic growth.
With risk and safe-haven flows in focus, the U.S. dollar maintained recent strength, benefiting from its haven status in times of global uncertainty. Gold prices moved lower, while yields on global government bonds climbed.
In premarket activity, U.S. mining stocks slid, and travel-related equities were also weaker. Major carriers such as United Airlines and Delta Air Lines were noted to have slipped in trading, and cruise operator Carnival Corp. fell amid analyst concern about fuel cost exposure.
Reports indicated Iran is reviewing a 15-point peace proposal from the U.S., but the White House issued warnings that additional air strikes would be launched if Tehran did not accept terms. White House Press Secretary Karoline Leavitt was quoted as saying the president "does not bluff and [...] is prepared to unleash hell," while the Wall Street Journal reported that Trump has told aides he would like the conflict to be brought to a swift conclusion.
Analysts at Vital Knowledge pointed out that the administration has publicly set May 14-15 as the dates for the president's planned trip to China, which the analysts suggested could reflect an expectation at the White House that the conflict will be resolved by that time.
Meanwhile, the Strait of Hormuz, a critical chokepoint for global energy shipments, remained effectively closed, according to multiple accounts. The waterway, through which roughly a fifth of the world’s oil and natural gas flows, has seen near-shutdown conditions for weeks because of the threat of attacks, pressuring markets and underpinning higher oil prices. Although crude has eased from a spike toward nearly $120 a barrel earlier this month, current levels remain well above pre-conflict prices from late February.
In developments on the battlefield, Israeli Defense Minister Israel Katz said the Israeli military killed Alireza Tangsiri, the commander of Iran's Revolutionary Guard navy, in overnight strikes. Katz stated that Tangsiri was "directly responsible" for placing mines that have helped block the Strait of Hormuz.
Investors and corporate managers continue to monitor how shifts in energy costs, military posture and diplomatic signals will affect demand, supply chains and operating costs across sectors, especially in travel, shipping, and energy-intensive industries.
Summary
- U.S. futures fell early Thursday as markets parsed mixed diplomatic signals and ongoing military movements in the Middle East.
- Brent and WTI crude both rose sharply, lifting energy prices back above the psychological $100 a barrel level amid an effective closure of the Strait of Hormuz.
- The dollar strengthened as a safe haven, gold declined, and global government bond yields rose.
Key points
- Equity futures: Dow futures down 351 points (0.8%), S&P 500 futures down 53 points (0.8%), Nasdaq 100 futures down 230 points (0.9%) at 07:36 ET (11:36 GMT).
- Energy markets: Brent rose 5.0% to $107.37 a barrel; WTI gained 4.9% to $94.73 a barrel as the Strait of Hormuz remains effectively closed and supply concerns persist.
- Sectors affected: Travel and leisure stocks (airlines and cruises), mining, and energy-related sectors are reacting to rising fuel costs and geopolitical risk.
Risks and uncertainties
- Diplomatic uncertainty - Reports of possible talks between the U.S. and Iran are at odds with continued military activity and disagreement over terms to end hostilities, leaving outcomes unclear; this affects markets tied to geopolitical risk.
- Energy supply disruption - The effective closure of the Strait of Hormuz, a route for roughly a fifth of global oil and gas flows, poses a material risk to energy markets and could drive further price volatility.
- Escalation of military action - Continued placement of U.S. ground troops and the potential for more air strikes, combined with reported targeted killings, increase the possibility of further conflict that would reverberate across global markets.