U.S. equity futures traded lower early Monday after Donald Trump halted plans to send negotiators for renewed talks with Iran, prolonging tensions between Washington and Tehran. The continued closure of the Strait of Hormuz is keeping pressure on global oil prices. At the same time, Verizon Communications Inc. (NYSE:VZ) is set to begin a packed week of corporate earnings, including updates from major artificial intelligence players.
Futures drift lower
By 03:30 ET, Dow futures were down 86 points, or 0.2%, while S&P 500 futures slipped 0.1% and Nasdaq 100 futures also eased by 0.1%. Markets are bracing for a week filled with earnings releases, central bank decisions, and any developments in U.S.-Iran diplomacy.
Major indices had ended the previous week higher, supported by optimism that talks between the U.S. and Iran could resume and potentially reopen the Strait of Hormuz. However, sentiment shifted after Trump cancelled plans for negotiations in Pakistan, indicating the disruption to the key oil shipping route may persist. He added that Tehran can “call me” as Washington holds “all the cards.”
Oil rises as tensions persist
Uncertainty over the next phase of negotiations continues to dominate market sentiment. Analysts at Vital Knowledge said that “there will probably be a million more Iran headlines” for markets to process in the days ahead.
According to Axios, Iran has put forward a new proposal to the U.S. that would reopen the Strait of Hormuz, end hostilities, and delay nuclear negotiations until later. Despite this, supply through the route remains constrained, pushing oil prices higher.
Brent crude futures climbed 2.4% to $107.87 a barrel, while U.S. West Texas Intermediate rose 2.3% to $96.58 a barrel.
Verizon to open earnings flood
The earnings season gathers pace with Verizon Communications Inc. (NYSE:VZ) reporting before the market opens. Consensus estimates compiled by Bloomberg point to a drop of 89,169 in retail postpaid phone subscribers. Adjusted EBITDA is expected at $13.14 billion on revenue of $34.8 billion.
Investors will focus on Verizon’s strategy to integrate its wireless and broadband offerings to support subscriber growth, particularly after strengthening its fiber network through the acquisition of Frontier Communications.
In January, Verizon issued upbeat guidance for full-year profit and free cash flow, alongside launching its first share buyback programme in nearly six years.
The week ahead will also bring results from major technology firms, including Alphabet and Microsoft, with markets watching closely for updates on their substantial artificial intelligence investments, seen as critical to the sector’s expansion.
Budget airlines seek support
A group of U.S. low-cost carriers, including Frontier and Avelo, are pursuing $2.5 billion in government aid in exchange for warrants convertible into equity, according to a report by The Wall Street Journal.
The figure reflects higher projected fuel costs, with estimates assuming jet fuel prices will average above $4 per gallon for the remainder of the year. Discussions over a potential support package are expected to continue.
Airlines globally have been under pressure from rising fuel costs, driven by supply disruptions linked to the ongoing conflict involving Iran.
Bank of Japan decision in focus
Attention is also turning to the upcoming policy decision from the Bank of Japan, which is widely expected to leave interest rates unchanged following its April 28 meeting.
The central bank is projected to maintain its benchmark rate at 0.75%, marking a third consecutive hold after a rate increase in December. While markets had previously anticipated another hike, recent messaging from policymakers has suggested a more cautious stance.
Uncertainty tied to the Iran conflict and its economic impact is likely to keep the Bank of Japan in wait-and-see mode, although it may still signal a hawkish bias and raise inflation forecasts amid rising energy and shipping costs.