U.S. equity futures traded lower on Tuesday, fueled by persistent uncertainty over the wider U.S.-Iran negotiation. Investors also evaluated the likelihood of tighter monetary policy amid growing concerns about inflation.
At 4:24 p.m. (Bangkok Time), Dow Jones futures slipped 0.13%, S&P 500 futures dipped 0.04%, and Nasdaq 100 futures edged 0.02% lower. These moves followed a flat finish for the S&P 500 on Monday, with ongoing tensions in the Middle East keeping market sentiment cautious.
Oil prices surged on Tuesday due to fears of potential supply interruptions, pushing West Texas Intermediate futures up 3% to $84.59 per barrel and lifting Brent crude by 2.62% to $90.02. The rise in energy costs has intensified concerns over inflation, fueling speculation that the Federal Reserve could accelerate future interest rate increases. Market indicators, including the CME FedWatch Tool, showed the probability of a quarter-point hike in September rising to nearly 52%, compared to 44.4% the prior day.
Diplomatic efforts to address disruptions through the Strait of Hormuz made some progress, with Iran signaling it was nearing an agreement with Oman on a reopening plan. However, Tehran has made clear that it will not engage directly with the United States while specific conditions remain unmet. According to Iranian media and statements from adviser Majid Shakeri, Iran intends to avoid negotiations with the U.S. President Donald Trump and will reconsider only after his current term ends on January 20, 2029.
Looking ahead, market participants are focused on upcoming U.S. inflation data. The July consumer price report is set for release Wednesday, followed by the producer price index on Thursday. These indicators could significantly influence expectations for Fed policy after a recent soft labor market reading.
On the corporate side, investors await earnings updates from companies including Cardinal Health, On Holdings, Cava Group, CoreWeave, and Super Micro Computer, all due later today.
