Wall Street Futures Edge Higher as U.S.-Iran Conflict Escalates and PepsiCo Earnings Loom: Dow Jones, S&P, Nasdaq
U.S. stock index futures traded modestly higher on Thursday despite another round of military strikes between the United States and Iran, while investors prepared for quarterly results from PepsiCo (NASDAQ:PEP) and continued to monitor developments in global energy markets.
Oil prices eased slightly but remained well above levels seen before the latest escalation in the Middle East, underscoring continued concerns over supply disruptions and inflation.
Futures Recover After Mixed Wall Street Session
By 02:53 ET (06:53 GMT), Dow Jones futures were up 82 points, or 0.2%, S&P 500 futures had gained 21 points, or 0.3%, and Nasdaq 100 futures advanced 149 points, or 0.5%.
The major U.S. indices finished Wednesday’s session with mixed performances. The Dow Jones Industrial Average declined 1.1%, while the S&P 500 slipped 0.3%. The technology-heavy Nasdaq Composite managed to close 0.2% higher.
Investor sentiment weakened after U.S. President Donald Trump stated that the framework ceasefire agreement with Iran was “over”, prompting renewed concerns about rising energy prices and their potential impact on inflation.
Technology stocks helped offset broader market weakness. Nvidia shares gained after reports suggested China could soon permit limited domestic purchases of the company’s H200 artificial intelligence chips.
Investors also reviewed minutes from the Federal Reserve’s June policy meeting. Analysts at Vital Knowledge said the discussions carried a “fairly dovish tone on the monetary policy outlook” despite ongoing concerns about inflation linked to higher energy prices.
Fresh Military Action Raises Market Uncertainty
Military tensions continued to intensify after both the United States and Iran carried out additional strikes on Thursday.
According to U.S. Central Command, American forces targeted around 90 military sites across Iran, including air defence systems, missile facilities and drone storage locations. U.S. officials said the operation was intended to weaken Iran’s ability to threaten commercial shipping through the Strait of Hormuz.
Iran responded by launching strikes against what it described as U.S. military facilities in Kuwait and Bahrain. The Islamic Revolutionary Guards Corps also warned that further attacks on American bases in the Gulf would follow if Washington continued its military operations.
Together with earlier attacks this week, the latest developments have cast further doubt over the temporary ceasefire agreement signed in June. Negotiations on a longer-term settlement remain stalled by disagreements surrounding the Strait of Hormuz, Iran’s nuclear programme and regional conflicts involving Israel and Hezbollah.
Returning from the NATO summit, President Trump said Iran had reopened communications, stating that Tehran wanted to “make a deal so badly.” Iranian officials have not publicly commented on the possibility of renewed negotiations.
Oil Prices Remain Elevated
Brent crude continued to trade just below $78 per barrel after rising sharply during the latest escalation. By 03:42 ET, Brent futures were down 1.0% at $77.26 per barrel.
Oil remains significantly above the roughly $71 level recorded before hostilities resumed, reflecting concerns that shipping through the Strait of Hormuz could once again be disrupted. The strategic waterway carries around one-fifth of global oil and liquefied natural gas exports.
Before the latest conflict, tanker traffic had begun recovering following the June 17 ceasefire agreement, helping crude prices retreat from the more than $110 per barrel reached during the initial stages of the conflict earlier this year.
Higher energy prices continue to fuel concerns that inflation could remain elevated, increasing uncertainty over whether central banks, including the Federal Reserve, may eventually need to keep interest rates higher for longer.
PepsiCo Results in Focus
Corporate attention now turns to PepsiCo, which is scheduled to release quarterly earnings before the opening bell.
In April, the company reaffirmed its full-year guidance for the second time in 2026, although Chief Financial Officer Steve Schmitt warned investors that the “macroeconomic environment has become more volatile and uncertain because of ongoing geopolitical conflicts.”
The market continues to monitor whether higher energy and raw material costs linked to the conflict could pressure consumer goods companies. Schmitt said price increases remain a possible response to rising costs but stressed they would only be considered as a last resort.
PepsiCo shares have risen approximately 0.2% since the start of the year.
China’s Inflation Data Shows Mixed Picture
Economic data released on Thursday highlighted uneven price trends in China.
Consumer inflation slowed in June, with the Consumer Price Index (CPI) increasing 1.0% year-on-year, below expectations of 1.1% and slower than May’s 1.2% reading. On a monthly basis, consumer prices fell 0.3%.
Producer prices continued to strengthen. The Producer Price Index (PPI) rose 4.1% from a year earlier, matching forecasts and marking the strongest annual increase since July 2022.
Analysts said price weakness across many industrial sectors was partly offset by rising electronics prices, driven by ongoing shortages of memory chips linked to growing demand for artificial intelligence technologies.
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