U.S. stock futures pointed to a weaker start on Wednesday, suggesting Wall Street could extend the previous session’s losses as renewed tensions in the Middle East unsettled investor sentiment.
Markets came under pressure after President Donald Trump declared the U.S.-Iran ceasefire “over,” raising fears of a fresh escalation in regional conflict.
“As far as I’m concerned, it’s over,” Trump told reporters at the NATO summit in Ankara, Turkey, calling negotiations with Iran a “waste of time.”
The comments sent crude oil prices sharply higher, with U.S. crude futures climbing more than 4%.
The rise in oil prices has revived concerns over inflation and the future path of interest rates ahead of the release of the minutes from the Federal Reserve’s June monetary policy meeting later in the day.
Trump’s remarks followed confirmation from U.S. Central Command that it had completed a fresh wave of offensive strikes against Iran, targeting more than 80 sites in response to Iran’s latest attacks on commercial vessels transiting the Strait of Hormuz.
Iran’s Revolutionary Guards claimed they targeted U.S. military sites in Bahrain and Kuwait hours after the U.S. strikes.
On Tuesday, U.S. equities attempted to recover after an early sell-off but lost momentum later in the session, ending the day broadly lower.
Technology stocks led the decline, with the Nasdaq posting the steepest losses among the major indices.
The Nasdaq dropped 302.47 points, or 1.2%, to 25,818.69. The S&P 500 fell 33.58 points, or 0.5%, to 7,503.85, while the Dow Jones Industrial Average slipped 130.76 points, or 0.3%, to 52,925.15.
Chipmakers were among the biggest laggards, pushing the Philadelphia Semiconductor Index down 4.7%.
The sector weakened after shares in South Korean memory chip manufacturer Samsung Electronics (USOTC:SSNHZ) plunged nearly 7%.
Samsung announced a 19-fold increase in second-quarter profit, but investors focused instead on concerns surrounding AI-related spending and demand.
“Although Samsung’s results were stellar, investors are getting nervous about the scale of money ploughing into AI and whether it’s a bubble waiting to burst,” said Dan Coatsworth, head of markets at AJ Bell.
Sentiment in the semiconductor sector was also hurt by a Reuters report stating that Chinese startup DeepSeek is developing its own artificial intelligence chip.
Networking shares also came under heavy selling pressure, dragging the NYSE Arca Networking Index down 3.7%.
Gold mining, airline and computer hardware stocks also recorded notable losses, while energy, pharmaceutical and healthcare companies outperformed.
Energy shares gained support from the sharp rise in crude oil prices, although higher energy costs weighed on broader market sentiment.
U.S. crude oil futures rallied following reports of projectile attacks on several commercial vessels travelling through the Strait of Hormuz.