US Stock Futures Rise Amid Uncertainty Over Potential US Involvement in Israel-Iran Conflict
On Wednesday, US stock futures rose slightly, with ongoing hostilities between Israel and Iran keeping investors on edge as they awaited the Federal Reserve's interest-rate decision later in the day. The Dow Jones Industrial Average (YM=F) edged up roughly 0.2%, while those on the S&P 500 (ES=F) rose 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) also moved up 0.3%, following a losing day for the major gauges.
Markets are closely monitoring any signs that the US could join the Middle East conflict, which has caused significant volatility in stocks since it broke out last week. President Trump's statement that "our patience is wearing thin" and his meeting with his national security team on Tuesday have fueled speculation that the US could join Israel's offensive. Iran has reportedly readied missiles for strikes on US bases in the region if the US does join the conflict.
In this context, investors are turning their attention to the Fed's policy decision, which is due at 2 p.m. ET. While the central bank is expected to hold interest rates steady, the focus is on the "dot plot" to determine whether two rate cuts are still on the table this year. Investors will also be listening closely to Chair Jerome Powell's comments at his press conference for insight into the economic pressures amid Trump's tariffs and trade policies.
Oil prices continued to rise, spiking to a five-month high on Tuesday, with concerns over the US joining the ongoing conflict between Israel and Iran continuing to boost the value of the commodity. Brent (BZ=F) traded above $76 a barrel after closing 4.4% higher in the previous session, while West Texas Intermediate (CL=F) was near $75. President Donald Trump's demand for Iran's "UNCONDITIONAL SURRENDER" and warning of a possible strike against the country's leader, Ayatollah Ali Khamenei, in a social media post added to these concerns.
The Middle East produces around a third of the world’s oil, and a wider conflict could drive prices even higher. The biggest concern for the oil market centers on the Strait of Hormuz, although there are no signs that Iran is seeking to disrupt shipping through the narrow waterway. About a fifth of the world’s daily crude output passes through the strait at the entrance to the Persian Gulf.
In summary, investors are keeping a close eye on developments in the Middle East and the Fed's decision, with both factors likely to have a significant impact on market sentiment and trading activity in the coming days.
