US stock futures experienced a slight dip early Tuesday, taking a breather after Wall Street’s recent surge. The rebound had been fuelled by hopes of de-escalation between the US and Iran, but those hopes have been dampened.
Futures contracts tied to the S&P 500 and the Dow Jones Industrial Average both edged down by 0.1%. Nasdaq 100 futures also dipped, trading below the flatline.
Monday saw markets rally following President Trump’s announcement of "very good and productive" discussions with Iran aimed at resolving the ongoing tensions. However, Iranian state media refuted these claims, asserting that no direct negotiations had occurred. The Dow had initially reacted positively, jumping over 1,100 points during the day.
This followed a tense weekend where Trump threatened potential strikes on Iranian energy infrastructure if the Strait of Hormuz remained closed. Iran retaliated with threats against US assets, sparking fears of further escalation.
The potential easing of tensions initially triggered a sharp decline in oil prices. West Texas Intermediate crude fell approximately 10%, settling near $88 a barrel, while Brent crude dropped almost 11%, closing just under $100. Oil futures saw a slight increase in late trading.
Looking ahead, investors are keenly awaiting upcoming US manufacturing data due to be released Tuesday morning. They are also keeping a close watch on the tail end of the earnings season, with GameStop scheduled to report after the market closes.
