U.S. futures slip as Iran airstrikes rattle markets

U.S. stock futures dipped in premarket trading Friday as investors weighed geopolitical risk from renewed American airstrikes on Iran.reuters
U.S. Central Command struck roughly 90 Iranian military targets over two nights; Iran retaliated by hitting U.S. assets in Kuwait, Qatar, and Bahrain.centcom+1
Oil prices whipsawed through the week, and Citigroup analysts said the two sides are likely to return to negotiations within weeks.cnbc

U.S. stock futures slipped on Friday as investors weighed renewed military tensions between the United States and Iran heading into the weekend, following two consecutive nights of American airstrikes that threaten to unravel a fragile ceasefire.

S&P 500 and Nasdaq Composite futures eased in premarket trading, with S&P 500 E-minis falling about 0.2%, according to Reuters. The pullback halted a strong Wall Street rally earlier in the week, as geopolitical risk reasserted itself over markets.reuters

Escalation in the Gulf

The market jitters followed a rapid escalation between Washington and Tehran. U.S. Central Command said it struck approximately 90 Iranian military targets on Wednesday night into Thursday, including air defense systems, coastal surveillance assets, missile and drone storage sites, and naval capabilities along Iran's coastline. The strikes came after President Donald Trump declared the three-week-old ceasefire "over" in response to Iranian attacks on commercial vessels in the Strait of Hormuz.centcom+3

Iran retaliated by targeting U.S. military infrastructure in Kuwait, Qatar, and Bahrain, according to Reuters, hitting Patriot missile systems with drones and striking a fuel storage facility. Iran's Health Ministry said U.S. airstrikes killed at least 14 people and wounded 78 over two days.aljazeera+2

The confrontation has put a Pakistan-brokered memorandum of understanding signed on June 16 — which had established a 60-day negotiating window set to expire on August 21 — under severe strain.aljazeera

Oil and Market Volatility

Oil markets whipsawed through the week. Brent crude surged above $80 a barrel on Wednesday — its biggest daily gain since May — after Trump's ceasefire declaration, according to CNBC. But prices reversed on Thursday as traders bet the conflict would not escalate into a full closure of the Strait of Hormuz, with Brent settling around $77 a barrel.reuters+1

The Wall Street Journal News Corp reported that U.S. oil reserves are not adequately prepared for a prolonged disruption, noting that while tanker traffic through Hormuz had begun normalizing after the June ceasefire, inventories had not yet been replenished.wsj

What Comes Next

Despite the hostile rhetoric, analysts expect diplomatic channels to reopen. Citibank Citigroup Inc. analysts told clients Thursday that the U.S. and Iran are likely to return to negotiations within weeks. The U.S. Treasury Department has revoked its temporary waiver on Iranian oil sanctions, with all new transactions prohibited after July 17.aljazeera+1

Tehran has filed a formal complaint with the United Nations Security Council, denouncing the strikes as a "war crime" and accusing Washington of violating the interim deal.aljazeera

Sources (29)