U.S. equity futures retreated early Wednesday after American forces carried out strikes against Iran in response to the downing of a helicopter near the Strait of Hormuz. The escalation in tensions weighed on market sentiment and led to an uptick in oil prices.
At 4:22 p.m. (Bangkok Time), futures contracts tracking the Dow Jones Industrial Average slipped 0.72%, while those tied to the S&P 500 dropped 0.87%. Nasdaq 100 futures saw steeper losses, falling 1.31%.
On Tuesday, ongoing volatility in chipmaker stocks placed pressure on major indexes, with the S&P 500 and Nasdaq Composite falling 0.26% and 0.97%, respectively. In contrast, the Dow gained 86.10 points, or 0.17%, as investors shifted away from AI-focused equities due to concerns that escalating conflict might prompt the Federal Reserve to raise interest rates in reaction to inflationary pressures.
The U.S. Central Command confirmed via social media that its forces had conducted “self-defense strikes” on Iranian targets. Iranian news outlets reported that at least six explosions occurred on Qaeshm Island in the Strait of Hormuz, according to Bloomberg’s report.
This latest military action followed the downing of a U.S. Apache helicopter on Monday in the region. President Donald Trump stated on Tuesday that Iran was responsible for the incident and promised a response, while Tehran has not directly acknowledged involvement. The renewed hostilities threaten to upset a tentative ceasefire and could complicate ongoing diplomatic efforts.
Investors are awaiting the release of May’s consumer price index at 8:30 a.m. (Eastern Time) Wednesday. Projections by Dow Jones suggest the annual inflation rate will reach 4.2% with a monthly increase of 0.5%, the highest levels seen since April 2023.
After Wednesday’s close, Oracle will announce earnings, drawing attention to the performance of its cloud business, which includes OpenAI among its clients, as activity in AI sectors fluctuates.
Later this week, investor focus will turn to the anticipated SpaceX initial public offering on Friday, which is expected to be the largest ever recorded.
