U.S. Futures Slip as Iran Rules Out Direct Talks, Tempering Ceasefire Optimism

U.S. stock index futures edged lower early Thursday, as investors reassessed the likelihood of a near-term resolution to the Middle East conflict following cautious signals from Iran. While Tehran confirmed it is reviewing a U.S.-backed ceasefire proposal, it ruled out direct negotiations with Washington, dampening earlier optimism.

As of 01:57 ET (05:57 GMT), S&P 500 futures fell 0.4% to 6,613.25 points, while Nasdaq 100 futures declined 0.4% to 24,261.0 points. Dow Jones futures also slipped 0.4% to 46,521.0 points, reflecting a broadly cautious tone across markets.

The pullback follows a volatile but ultimately positive session on Wall Street, where equities initially rallied after reports that the United States had presented a 15-point ceasefire plan to Iran. However, gains were pared as mixed responses from Tehran underscored the uncertainty surrounding diplomatic progress.

Iranian Foreign Minister Abbas Araqchi indicated that the country is open to considering proposals if its conditions are met, but emphasized that communications through intermediaries should not be interpreted as formal negotiations. He also made clear that direct talks with Washington are not currently being pursued.

Earlier reports suggested that Iran had rejected the U.S. proposal and introduced its own five-point framework for a ceasefire. The proposal reportedly includes demands for reparations related to recent hostilities, as well as potential measures affecting transit through the Strait of Hormuz. Tehran has also called for the inclusion of Lebanon in any broader agreement.

Despite geopolitical tensions, major U.S. indices closed higher on Wednesday, although well below session highs. The S&P 500 rose 0.5% to 6,591.94 points, while the Nasdaq Composite gained 0.8% to 21,929.83 points. The Dow Jones Industrial Average advanced nearly 0.7% to 46,428.57 points.

Markets remain highly sensitive to developments in the Middle East, with investors balancing hopes for de-escalation against the risk of further escalation. Additional pressure came from strong rhetoric out of Washington, where officials warned of severe consequences if Iran does not move toward a resolution.

In corporate developments, memory chip stocks came under pressure after Alphabet’s Google unveiled a new AI memory compression technology, TurboQuant. The innovation is expected to significantly reduce memory requirements for artificial intelligence applications without compromising performance.

Shares of Micron Technology, Seagate Technology, and Western Digital declined on concerns that widespread adoption of such technology could slow demand for advanced memory chips. Google is expected to present further details on TurboQuant at the upcoming ICLR 2026 conference.

Overall, markets remain in a cautious holding pattern, with geopolitical developments and technological shifts continuing to shape investor sentiment in the near term.