U.S. equity futures moved lower on Thursday evening as a spike in tensions in the Strait of Hormuz eroded hopes that recent diplomatic momentum between Washington and Tehran would lead to a de-escalation. The market also turned its attention to the forthcoming April nonfarm payrolls report for further signals on the outlook for interest rates.
By 19:18 ET (23:18 GMT), S&P 500 Futures were down 0.2% at 7,351.50 points. Nasdaq 100 Futures slipped 0.2% to 28,626.75 points, while Dow Jones Futures dropped 0.1% to 49,652.0 points.
The U.S. military said on Thursday that it intercepted Iranian attacks against three American warships transiting the Strait of Hormuz. Tehran had earlier accused the United States of breaching a ceasefire by striking multiple targets in and around the waterway. Observers noted Tehran appeared to be asserting greater control over Hormuz, while U.S. forces had earlier in the week launched and then abruptly halted an operation intended to restore commercial shipping through the channel.
President Donald Trump told ABC News that the ceasefire remained in place and characterized recent strikes as "a love tap." In a later post on social media, he warned that the United States could carry out further strikes against Iran if it did not accept a deal quickly. The resumption of military activity in the strait undermined recent optimism about a U.S.-Iran peace deal, even though both sides had indicated some progress toward an agreement earlier in the week.
The uptick in military action placed downward pressure on major U.S. equity benchmarks, pulling them back from recent record highs. On Thursday the S&P 500 fell 0.3% to 7,337.10 points. The NASDAQ Composite declined 0.1% to 25,806.20 points, and the Dow Jones Industrial Average slipped 0.6% to 49,596.60 points.
Within equity markets, chipmaking stocks retreated from recent highs as investors booked profits amid cooling risk appetite. Nonetheless, the semiconductor sector retained strength driven by ongoing optimism about artificial-intelligence related demand.
Attention now turns to Friday's nonfarm payrolls release for April. Market participants will closely examine the payrolls figure to assess whether disruptions stemming from the Middle East conflict have begun to affect hiring and the broader labor market. The monthly payrolls print typically feeds into expectations for monetary policy, and this April report arrives amid a growing conviction that the Federal Reserve will keep interest rates on hold for the remainder of the year due to uncertainties tied to the Iran situation.
Given the combination of renewed regional hostilities and an important labor market report, investors are parsing incoming data and developments for signs of whether geopolitical shocks will translate into measurable economic effects that could influence central-bank decisions.