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U.S. stock index futures moved slightly lower on Thursday as investors remained cautious amid the escalating conflict involving Iran, despite gains on Wall Street in the previous session.
As of 05:35 ET (10:35 GMT), Dow Jones Futures fell 55 points, or 0.1%, while S&P 500 Futures and Nasdaq 100 Futures hovered near the flatline.
The major U.S. indices closed higher on Wednesday, supported by strong economic data and reports suggesting Iran might be open to dialogue. The Dow Jones Industrial Average rose 0.5%, the S&P 500 gained 0.8%, and the Nasdaq Composite climbed 1.3%.
Middle East conflict continues to escalate
However, optimism over a potential quick resolution to the conflict has faded as hostilities entered their sixth consecutive day. Iran launched a new wave of missiles targeting Israel, signaling that tensions remain far from easing.
The attack came shortly after the U.S. Senate voted against a proposal to halt the ongoing air campaign, which would have required congressional authorization for continued military action.
Meanwhile, Mojtaba Khamenei, son of Iran’s slain Supreme Leader Ayatollah Ali Khamenei, has reportedly emerged as a leading candidate to succeed his father, suggesting Tehran may not yield to international pressure anytime soon.
One of the immediate economic consequences of the conflict is already being felt in the United States, where gasoline prices have begun rising, raising concerns about broader inflationary pressures and potential impacts on economic growth.
International Monetary Fund Managing Director Kristalina Georgieva warned that the crisis is testing “global economic resilience.”
Strong economic data offers some support
Despite geopolitical concerns, investors received some reassurance from stronger-than-expected U.S. economic data released Wednesday.
Private payrolls data for February showed the labor market continuing to expand, while the ISM services purchasing managers’ index (PMI) climbed to its highest level in more than three years, indicating robust demand in the services sector.
In addition, the Federal Reserve’s Beige Book report suggested policymakers remain relatively optimistic about the state of the U.S. economy.
Investors are now looking ahead to Challenger job cuts data later Thursday and the highly anticipated nonfarm payrolls report on Friday, which could offer further clues about the trajectory of the labor market and future Federal Reserve policy.
Earnings focus shifts to retail sector
Corporate earnings will also remain in focus, particularly in the retail sector.
Results are expected before the market opens from Kroger, Burlington Stores, and BJ’s Wholesale, while Costco is scheduled to report after the closing bell.
Meanwhile, Broadcom shares surged in premarket trading after the semiconductor company reported stronger-than-expected quarterly results and issued revenue guidance above market forecasts, driven by strong demand for artificial intelligence chips.
The company also announced a $10 billion share buyback program, further boosting investor confidence.
