US stock futures climbed in the overnight session late Wednesday, reversing a sell-off triggered by escalating tensions between the US and Iran after President Donald Trump indicated the interim deal to end the conflict may be 'over.' Nasdaq 100 futures rose 0.19%, S&P 500 futures climbed 0.08%, and Dow futures were up 0.10% at 9:12 PM EDT. The reversal followed a mixed Wednesday close where the Dow Jones Industrial Average shed 570 points (down 1.09%) and the S&P 500 declined 0.28%, while the Nasdaq rose 0.2%, as markets reacted to the US launching fresh strikes on Iran in retaliation for Tehran's attacks on commercial ships in the Strait of Hormuz. Federal Reserve June meeting minutes released Wednesday intensified inflation concerns, with a few participants arguing there was already a case for raising interest rates. Oil prices surged overnight, with Brent crude futures up nearly 1% to around $78.77 per barrel and WTI crude futures rising about 0.88% to $74.17 per barrel, as geopolitical risks resurfaced following the US military action in the critical waterway.
US Stock Futures Reverse Wednesday Losses Overnight
At 9:12 PM EDT on Wednesday, Nasdaq 100 futures rose 0.19%, S&P 500 futures climbed 0.08%, and Dow futures were up 0.10%. Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ), and the SPDR Dow Jones Industrial Average ETF Trust (DIA) were all trading higher at the time of writing, with sentiment in the green. The iShares 20+ Year Treasury Bond ETF (TLT) was trading down 0.12% amid 'extremely bearish' sentiment.
Dow Records 1.09% Decline on Wednesday Close
The benchmark indexes closed mixed on Wednesday amid the escalating conflict in the Middle East and the Federal Reserve's June minutes that showed growing concerns over inflation among policymakers. The Dow Jones Industrial Average shed more than 570 points, closing down 1.09% at 52,348.39. The S&P 500 declined 0.28% to 7,482.71, while the Nasdaq rose about 51 points to end 0.2% higher at 25,870.65, bolstered by a rise in semiconductor stocks.
Fed June Minutes Show Growing Inflation Concerns Among Policymakers
Inflation concerns intensified at the Federal Reserve's June meeting, as per the minutes released on Wednesday. The notes showed that policymakers are increasingly worried that price pressures are spreading beyond a handful of sectors and could require tighter monetary policy. While officials unanimously kept interest rates unchanged, a few participants argued that there was already a case for a rate hike. As the minutes noted, "upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit," adding that a few participants felt "there was a case for raising the target range for the federal funds rate, but those participants indicated that they supported maintaining the current target range at this meeting."
US Launches Additional Strikes Against Iran After Strait of Hormuz Attacks
The US began fresh strikes on Iran on Wednesday, retaliating to Tehran's attacks in the Strait of Hormuz that threatened to disrupt the passage of ships through the critical waterway once again. "At the direction of the Commander in Chief, U.S. Central Command forces have started conducting additional strikes against Iran to further degrade their ability to threaten freedom of navigation in the Strait of Hormuz," the U.S. Central Command said Wednesday in a post on X. "The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews freely navigating a vital international waterway," it added.
Earlier, President Donald Trump had indicated that he may not be looking at negotiating a deal with Iran after the latest tensions in the Strait. Prior to that, at a NATO summit in Turkey, when asked about the memorandum of understanding with Iran, Trump said, "It's a very interesting question. To me, I think it's over. I don't want to deal with them." Further, in a post on Truth Social, Trump shared a video clip of a bombing in Chabahar, Iran, adding that, "This is in retribution for yesterday's bombing of ships by Iran. If it happens again, it will get much worse!"
"The United States is playing with fire in Iran. Continued escalation, instead of rational diplomacy, has risks that could become catastrophic," Brett Erickson, managing principal at Obsidian Risk Advisors, said in a post on X.
Oil Prices Climb Nearly 1% Amid US-Iran Conflict
Crude oil prices soared on Wednesday, climbing overnight as concerns about oil prices resurfaced after fresh strikes in Iran. At the time of writing, Brent crude futures expiring in August were up nearly 1%, trading at around $78.77 per barrel. Meanwhile, WTI crude futures expiring in August rose by about 0.88% to $74.17 per barrel. "Heading into Thursday, oil prices likely will be top of mind," Mason Mendez, global real assets analyst at Wells Fargo Investment Institute, reportedly told CNBC.
Yields on the 10-year Treasury rose to 4.579% at the time of writing, while spot gold prices declined to around $4,074.18 an ounce.
WULF, CMPS, ANET, PENG Stocks Post Gains on Wednesday
TeraWulf Inc. (WULF) shares soared nearly 13% at close and continued to climb overnight on Wednesday after Morgan Stanley raised its price target on the stock to $72 from $66.50, while keeping an 'Overweight' rating.
COMPASS Pathways (CMPS) shares jumped more than 7% at close on Wednesday amid a series of price target updates and Wall Street optimism over its positive 26-week data from the second late-stage trial of COMP360 in treatment-resistant depression.
Arista Networks Inc. (ANET) stock jumped onto the retail radar after closing up nearly 9%, as AI-driven demand for the company has boosted optimism.
Penguin Solutions Inc. (PENG) shares soared over 25% at close amid a series of Wall Street price target hikes as analysts see it benefiting further from continued AI demand.
Global Markets Trade Mixed at Thursday Open
Asian markets were trading mixed at the open on Thursday. South Korea's KOSPI and Japan's Nikkei 225 edged higher at the time of writing. However, China's SSE Composite index and Australian stocks were trading lower at the open.
FAQ
What did US stock futures do in the overnight session on Wednesday?
US stock futures climbed in the overnight session late Wednesday, with Nasdaq 100 futures rising 0.19%, S&P 500 futures climbing 0.08%, and Dow futures up 0.10% at 9:12 PM EDT, reversing a sell-off triggered by escalating US-Iran tensions.
Why did the Dow Jones Industrial Average decline on Wednesday?
The Dow Jones Industrial Average shed more than 570 points, closing down 1.09% at 52,348.39 on Wednesday, amid escalating conflict in the Middle East following US strikes on Iran and the Federal Reserve's June minutes that showed growing concerns over inflation among policymakers.
How did oil prices react to the US-Iran conflict?
Crude oil prices soared overnight on Wednesday, with Brent crude futures expiring in August up nearly 1% to around $78.77 per barrel and WTI crude futures expiring in August rising about 0.88% to $74.17 per barrel, as concerns resurfaced after the US launched fresh strikes on Iran.
