U.S. stock index futures moved lower late Wednesday after a sharp rise in oil prices reignited worries about the inflationary effects of the Iran conflict.
Futures erased earlier gains and slipped into negative territory following a positive trading day on Wall Street, where strong economic data and reports suggesting Iran was open to further dialogue had briefly lifted risk sentiment.
However, Tehran largely rejected claims that it had sought renewed talks with Washington, pushing oil prices sharply higher during the Asian session on Thursday. Brent and WTI futures jumped between 3% and 4%.
S&P 500 Futures declined 0.16% to 6,869.50 points by 23:43 ET. Nasdaq 100 Futures dropped 0.16% to 25,085.75 points, while Dow Jones Futures fell 0.3% to 48,649.0 points.
Oil prices surge as Iran conflict rages on
Oil prices climbed steeply during Asian trading on Thursday after Iran launched a barrage of missiles at Israel, marking the sixth straight day of fighting in the Middle East.
The attack occurred only hours after the U.S. Senate rejected a proposal intended to limit President Donald Trump’s authority to launch military strikes against Iran.
Energy-driven inflation has been a major concern surrounding the Iran conflict, particularly after military activity in the Strait of Hormuz disrupted oil flows that supply a significant share of global markets, pushing commodity prices higher.
These developments have heightened fears that a prolonged conflict could keep energy prices elevated, fueling inflation and prompting a more hawkish response from major central banks worldwide.
Oil’s surge on Thursday also followed statements from Iranian officials denying they had approached Washington to discuss de-escalation.
Broadcom rises on strong AI-fueled outlook
Broadcom Inc. (NASDAQ:AVGO) jumped more than 5% in after-hours trading after reporting fiscal first-quarter results that exceeded expectations for both revenue and profit.
The company also projected second-quarter revenue of $22 billion, above the $20.4 billion expected, with nearly half expected to come from sales of its advanced AI chips.
Broadcom’s results reinforced confidence that the AI investment theme remains intact, particularly for semiconductor companies positioned to benefit from rapidly expanding demand.
Rival NVIDIA Corporation (NASDAQ:NVDA) rose 0.3% in after-hours trading. The chipmaker’s CEO, Jensen Huang, said earlier Wednesday that AI-driven chip demand was “higher than very high.”
Software company CrowdStrike Holdings Inc. (NASDAQ:CRWD) climbed more than 4% on Wednesday after reporting quarterly earnings that exceeded expectations, easing some concerns about AI-related disruption across the enterprise software sector.
Wall St aided by strong data
Wall Street indexes finished higher on Wednesday, partly supported by stronger-than-expected private payrolls data for February, which indicated continued expansion in the labor market.
Separately, the purchasing managers’ index for the U.S. services sector published by Institute for Supply Management rose to its highest level in more than three years in February, pointing to solid domestic demand. Meanwhile, the Federal Reserve’s Beige Book indicated the central bank maintained a broadly positive outlook on the economy.
The releases come ahead of Challenger job cuts data due Thursday and the closely watched nonfarm payrolls report scheduled for Friday, which investors will monitor for further signals on the path of interest rates.
The S&P 500 gained 0.8% on Wednesday, the NASDAQ Composite advanced 1.3%, while the Dow Jones Industrial Average rose 0.5%.