Investors are monitoring a mix of geopolitical tensions, corporate earnings developments and central bank policy decisions, with U.S. stock futures pointing modestly higher after a sharp sell-off on Wall Street. Renewed military exchanges between the United States and Iran remain in focus, while Oracle (NYSE:ORCL) shares have come under pressure following plans to raise significant funding for its artificial intelligence expansion. Meanwhile, markets are preparing for an expected interest-rate increase from the European Central Bank.
U.S. Futures Signal Modest Recovery
U.S. equity futures moved higher on Thursday, indicating a potential rebound after major indices posted steep losses in the previous session amid rising inflation concerns and escalating tensions in the Middle East.
As of 03:13 ET (07:13 GMT), Dow Jones futures were up 215 points, or 0.4%. S&P 500 futures gained 38 points, or 0.5%, while Nasdaq 100 futures advanced 230 points, or 0.8%.
The previous session saw the Dow Jones Industrial Average record its weakest performance since October, falling 1.9%. The Nasdaq Composite dropped 2%, while the S&P 500 declined 1.6%, marking its lowest closing level in five weeks.
Market sentiment was hit by President Donald Trump’s warning that Iran would “pay the price!!!” for delaying peace negotiations with Washington, alongside a fresh round of military strikes between the two countries and continued clashes involving Hezbollah militants in Lebanon.
Adding to investor concerns, U.S. consumer inflation accelerated to its highest level in years, highlighting the impact of rising energy prices linked to the conflict. Markets are now awaiting the latest producer price data due later on Thursday.
“With signs of a near-term resolution fading, investors grew more concerned about the stagflationary scenarios again, with bonds and equities selling off on both sides of the Atlantic,” analysts at Deutsche Bank said.
Questions surrounding the sustainability of the artificial intelligence boom also persisted. Shares in Super Micro Computer fell sharply after the company became the latest AI-related business to seek billions of dollars in fresh capital, fuelling concerns that firms may be struggling to finance the substantial infrastructure investments required to support AI growth.
Washington and Tehran Exchange New Strikes
Military tensions intensified as the United States and Iran launched further attacks against one another for a second consecutive day.
President Donald Trump warned that additional action could be taken unless Tehran agreed to an immediate peace deal. According to U.S. Central Command (CENTCOM), American forces conducted strikes on multiple Iranian military targets overnight, describing the operations as “self-defense” following the downing of a U.S. helicopter in the Strait of Hormuz.
CENTCOM subsequently stated that its latest wave of military operations had concluded.
Media reports indicated that Iran responded with attacks targeting several U.S. military facilities and allied positions across the Gulf region, with explosions reportedly heard in Kuwait, Bahrain and Jordan. However, there was no immediate independent confirmation of those claims.
Oil Prices Pull Back After Early Gains
Oil markets retreated after initially rising in response to the latest military developments, as traders weighed reports suggesting diplomatic discussions between Washington and Tehran may still be ongoing.
CNN reported, citing a diplomatic source, that talks between the two countries had continued overnight despite the escalation in hostilities.
By 03:30 ET, Brent crude futures for August delivery had fallen 0.6% to $92.59 per barrel, while West Texas Intermediate crude slipped 0.5% to $89.58 per barrel.
Both benchmarks had risen more than 2% earlier in Asian trading before reversing course. Markets were also assessing claims from Tehran that shipping through the Strait of Hormuz had been suspended, a statement that was subsequently denied by the U.S. military.
Oil prices ended the previous session nearly 2% higher.
Oracle Falls Despite Strong Quarterly Results
Oracle (NYSE:ORCL) reported quarterly earnings and revenue that exceeded market expectations and also raised its annual adjusted earnings-per-share guidance.
Despite the strong operational performance, the stock declined in after-hours trading after the company revealed plans to secure approximately $40 billion in financing during fiscal 2027.
“[T]his is an OK release with continued robust growth in backlog, and the cash performance wasn’t as bad as feared (thanks to lower capex). But the company is still facing a period of heavy cash outflows as it builds the infrastructure needed to fulfill its backlog, and this will require more debt and equity,” analysts at Vital Knowledge said in a note.
The Texas-based software group has increasingly focused on cloud infrastructure and AI-related data centre development, while continuing to generate substantial revenue from its traditional database and enterprise software businesses. However, investors remain focused on the scale of borrowing required to fund its expanding AI infrastructure strategy.
ECB Set to Raise Rates
Attention in Europe is centred on the European Central Bank, which is expected to announce a 25-basis-point increase in its deposit rate following the conclusion of its latest policy meeting.
If delivered, the move would raise the key rate to 2.25% from 2.0% and represent the ECB’s first interest-rate increase in almost three years.
Inflation across the eurozone has climbed above 3%, exceeding the central bank’s 2% target and strengthening the argument for tighter monetary policy despite a weakening economic outlook.
However, policymakers must balance inflation concerns with signs of slowing growth across the region.
“On the activity side, we have already seen a weak batch of German factory orders data for April today, and the risk is that eurozone manufacturing activity data now starts to deteriorate after hoarding/inventory building earlier this year around the uncertainty of the Gulf conflict,” analysts at ING said in a note.