Stock futures took a hit and oil prices climbed on Wednesday night following new U.S. strikes against Iran.
S&P 500 futures fell by 0.4%, while Nasdaq 100 futures dropped by 0.6%. Similarly, Dow Jones Industrial Average futures lost 123 points, translating to a 0.3% decrease.
On Thursday, Asia-Pacific markets opened lower, with South Korea’s Kospi seeing the most significant fall. In early trading, the Kospi dropped 4.1%. Japan’s Nikkei stock average declined by 2.3%, and Australia’s S&P/ASX 200 fell by 0.97%.
In after-hours trading, shares of Oracle plummeted over 11% after the tech giant announced plans to raise $20 billion in both equity and debt to enhance its artificial intelligence capabilities. This news weighed on S&P 500 futures, raising concerns about potential losses in the tech sector.
The U.S. Central Command reported launching another “self-defense strike” against Iran late Wednesday, a move that followed directives from President Trump. As a result, West Texas Intermediate Crude Oil Futures rose nearly 3%, reaching around $92 per barrel.
Overall, stock prices experienced downward pressure during regular trading on Wednesday due to ongoing declines in the semiconductor sector and escalating tensions with Iran. The Dow decreased by 953.33 points, or 1.87%, while the S&P 500 dropped by 1.62%. The tech-heavy Nasdaq Composite fell by 1.98%.
Victoria Fernandez, the chief market strategist at Crossmark Global Investments, observed a shift in investor behavior. Investors seem to be moving away from the artificial intelligence trend that has supported stock prices this year. She expressed on CNBC’s “Closing Bell” that there’s a noticeable rotation from technology to sectors that have struggled recently, such as pharmaceuticals and biotech, as well as financials and energy.
The fragile ceasefire between the U.S. and Iran was further strained after President Trump criticized Iran’s timeliness in negotiations and suggested they would “pay a price,” promising stronger actions against them.
Looking ahead, investors are keenly awaiting May’s producer price index, set to be released on Thursday at 8:30 a.m. ET. Economists surveyed by Dow Jones predict an overall inflation increase of 0.7% for the month, with core inflation anticipated to rise by 0.5%, which is a reduction compared to April’s figures of 1.4% and 1%, respectively.
Additionally, traders will be monitoring the number of new jobless claims for the week ending June 6, which will also be reported Thursday morning.
