US futures slip on war uncertainty

NEW YORK: US stock index futures fell on Thursday after gains in the previous session, as investors remained cautious over the Middle East conflict and uncertain about prospects for de-escalation.
President Donald Trump said Iran was desperate to strike a deal to end the fighting, contradicting Iran’s foreign minister, who said Tehran was reviewing a US proposal but had no intention of entering talks to wind down the conflict.
The mixed signals left markets on edge, with hopes for a breakthrough to restore shipping through the vital Strait of Hormuz still uncertain.
“The relative calm in markets suggests some investor confidence that hostilities may eventually wind down, however slim that prospect remains,” said Molly Schwartz, cross-asset macro strategist at Rabobank.
At 0455 ET, Dow E-minis were down 242 points, or 0.52 per cent, S&P 500 E-minis were down 39.5 points, or 0.59 per cent, and Nasdaq 100 E-minis were down 177 points, or 0.73 per cent.
Wall Street’s main indexes closed higher on Wednesday after Washington sent a proposal to Iran through Pakistan, while comments from Iranian officials suggested Tehran might be open to diplomatic offers even as it publicly denied any ongoing negotiations.
“Investors are trying to price out the war and price in a peace rally ahead of time, but risks remain elevated,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The oil price spike linked to the conflict has revived inflation concerns, complicating the outlook for central banks and interest rates.
Money markets are no longer pricing in any US Federal Reserve rate cuts this year, after previously expecting about two before the Iran conflict erupted, according to CME Group’s FedWatch tool.
Investors will also watch weekly US jobless claims data and comments from Fed governors Lisa Cook, Stephen Miran, Michael Barr and Philip Jefferson.
Among individual stocks, Olaplex Holdings jumped 47 per cent in premarket trading after Germany’s Henkel agreed to buy the hair care brand in a $1.4 billion deal.
US-listed gold miners fell as bullion prices dropped more than 2 per cent. Newmont lost 2.8 per cent, Sibanye Stillwater fell 3.7 per cent and Harmony Gold shed 3 per cent. — Reuters