U.S. stock futures pointed to a stronger open on Thursday, indicating that equities could recover some of the heavy losses recorded in the previous session.
Investors appear to be stepping back into the market after Wednesday’s sharp decline, which pushed both the Nasdaq and the S&P 500 to their lowest closing levels in a month.
Intel Boosts Semiconductor Sector Sentiment
Technology shares, particularly semiconductors, are expected to support the early advance.
Intel (NASDAQ:INTC) rose 4.6% in premarket trading after Bank of America upgraded the stock to Buy from Underperform, providing a lift to sentiment across the chipmaking sector.
The positive momentum in technology stocks may help offset broader concerns surrounding inflation and geopolitical risks.
Oil Surge Limits Market Optimism
Despite the stronger futures market, gains were trimmed as oil prices moved sharply higher following new comments from President Donald Trump regarding Iran.
In a post on Truth Social, Trump said the United States would strike Iran “very hard tonight” and claimed Washington intended to take control of the country’s oil and gas markets “at some point in the not too distant future.”
The remarks heightened concerns about potential disruptions to global energy supplies and contributed to renewed volatility in commodity markets.
Producer Price Data Raises Inflation Concerns
Investor enthusiasm was also tempered by fresh inflation data released by the Labor Department.
A report showed that producer prices increased by more than economists had anticipated during May, adding to concerns that inflationary pressures remain persistent.
Higher inflation could complicate the outlook for interest rates and monetary policy, limiting the scope for a sustained equity market rally.
Stocks Fell Sharply on Wednesday
U.S. equities traded without a clear direction early on Wednesday before selling accelerated throughout the day.
The major indices finished near their session lows.
The Dow Jones Industrial Average dropped 953.33 points, or 1.9%, to 49,918.78. The Nasdaq Composite tumbled 509.32 points, or 2.0%, to 25,169.50, while the S&P 500 lost 119.66 points, or 1.6%, to close at 7,266.99.
Escalating U.S.-Iran Tensions Weigh on Markets
Market sentiment deteriorated as President Donald Trump intensified his rhetoric toward Iran following recent military exchanges between the two countries.
“We hit them hard yesterday, and we’re going to hit them hard again today,” Trump told reporters at the White House. “We’re going to be attacking them and attacking them very hard.”
The comments followed a statement from U.S. Central Command confirming that American forces had conducted what it described as “self-defense strikes” against Iranian targets after a U.S. helicopter was shot down.
According to CENTCOM, U.S. Air Force and Navy aircraft carried out precision strikes against Iranian air defense systems, ground control facilities and surveillance radar installations near the Strait of Hormuz.
Iran subsequently launched attacks against U.S. military facilities in Kuwait, Bahrain and Jordan, according to reports, while also warning that it would respond to any further threats or military action.
In another Truth Social post on Thursday morning, Trump said Iran had “taken too long to negotiate a deal” and would now have to “pay the price!”
Oil Prices Jump on Supply Concerns
The worsening geopolitical situation drove oil prices higher as traders worried about potential disruptions to energy supplies from the Middle East.
Market participants largely ignored Trump’s assertion that the United States had quietly assisted in moving more than 100 million barrels of oil through the Strait of Hormuz.
The rise in crude prices added to broader inflation concerns and weighed on sentiment across several sectors.
Consumer Inflation Data Meets Expectations
Separately, the Labor Department reported that consumer inflation increased in line with forecasts during May.
The Consumer Price Index rose 0.5% during the month after increasing 0.6% in April, matching economist expectations.
On an annual basis, consumer inflation accelerated to 4.2% from 3.8% in April, also in line with forecasts.
Core inflation, which excludes food and energy prices, rose 0.2% in May following a 0.4% increase in April. Economists had expected a 0.3% increase.
The annual core inflation rate edged up to 2.9% from 2.8%, matching market expectations.
Airlines, Gold and Technology Stocks Lead Declines
The sharp increase in oil prices hit airline shares particularly hard, with the NYSE Arca Airline Index plunging 5.4%.
Gold stocks also came under pressure as bullion prices weakened, pulling the NYSE Arca Gold Bugs Index down 5%.
Computer hardware, semiconductor and housing-related stocks likewise posted notable losses during Wednesday’s session.
In contrast, energy companies outperformed the broader market as higher oil prices boosted the sector.