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U.S. stock futures edged lower on Tuesday, pausing after a strong rally in the previous session, as rising oil prices and persistent geopolitical tensions weighed on investor sentiment.
By 07:24 ET (11:24 GMT), Dow futures fell 25 points (0.1%), while S&P 500 futures slipped 0.1% and Nasdaq 100 futures declined 0.2%.
Wall Street gains face fresh pressure
The modest pullback in futures followed a rebound on Monday, when equities were lifted by hopes that an international coalition could support U.S. efforts to reopen the Strait of Hormuz—a critical shipping route that handles roughly 20% of global oil supply.
However, optimism has since been tempered. While the United Kingdom and France signaled openness to discussions, several key U.S. allies, including Germany and Japan, declined to participate in securing the waterway.
President Donald Trump maintained that the U.S. could reopen the strait independently, although he noted that multiple countries had expressed potential willingness to assist.
Oil surge fuels inflation concerns
Oil prices remained a key driver of market sentiment. Brent crude climbed 2.9% to $103.13 per barrel, while West Texas Intermediate (WTI) rose 3.6% to $95.84 per barrel.
Crude prices have surged by more than 40% since the start of U.S.-Israeli strikes on Iran in late February, intensifying fears of a global energy shock.
Adding to supply concerns, reports indicated that a tanker near the UAE port of Fujairah was struck by a projectile, while a drone attack caused a fire at a major oil facility. Although damage appeared limited, the incidents highlighted ongoing risks to energy infrastructure.
Inflation risks ripple through markets
The sustained rise in oil prices has heightened concerns over inflation, with potential spillover effects across global economies.
Corporate responses are already emerging. Delta Air Lines CEO Ed Bastian noted that the company has raised airfares to offset fuel costs, which have reportedly doubled since the start of the quarter. Despite this, Delta shares rose in premarket trading after the airline reaffirmed its earnings outlook, supported by strong revenue.
Central banks in focus
With inflation risks mounting, attention is now turning to a series of key central bank meetings this week, including decisions from the Federal Reserve, European Central Bank, and Bank of Japan.
Markets are increasingly sensitive to any signals that policymakers may adopt a more hawkish stance in response to rising energy prices.
Outlook
While recent gains in equities reflect optimism around potential diplomatic or logistical solutions in the Middle East, elevated oil prices and geopolitical uncertainty continue to pose significant risks.
Investors are likely to remain cautious in the near term, balancing hopes for stabilization against the growing threat of energy-driven inflation and tighter monetary policy.
