US stock futures traded with mild losses in Tuesday’s session, 19 May, as traders continued to monitor the latest developments in the Middle East, while the technology stocks that had powered Wall Street to record highs showed signs of cooling.
Nasdaq 100 futures slipped 0.7%, while S&P 500 futures fell 0.4%, putting the benchmark index on track for its longest losing streak since March. Futures tied to the Dow Jones Industrial Average were also down marginally by 0.02%.
In the previous session, both the Nasdaq and the S&P 500 closed in the red, although they recovered most of their intraday losses amid hopes of easing tensions in West Asia.
On Monday, US President Donald Trump said he had suspended a planned strike on Iran scheduled for Tuesday following appeals from Saudi Arabia, Qatar, and the UAE. He added that the Gulf nations believed a deal with Tehran acceptable to Washington could still be achieved.
The Iran conflict has now stretched beyond 80 days, while the Strait of Hormuz remains largely disrupted, with no clear pathway to a resolution. Last week’s two-day summit between Trump and Chinese President Xi Jinping ended without any concrete progress toward reopening the strategic shipping route.
Despite the prolonged standoff in the Middle East, US stocks had climbed to multiple record highs in recent months, largely driven by the artificial intelligence-led rally. However, the momentum has recently cooled amid rising bond yields and elevated crude oil prices.
Higher bond yields tend to weigh on technology stocks, as their valuations are heavily dependent on expectations of strong future earnings growth.
The rally in tech stocks came to a halt on Friday after a sharp sell-off in global bond markets triggered concerns that major central banks may adopt tighter monetary policies as the Middle East conflict continues to push oil prices higher and fuel inflation fears.
“Markets are no longer moving on AI excitement alone. Rising oil prices, higher bond yields, and doubts about how quickly companies can monetise AI are finally starting to matter. And after months of nearly nonstop gains, investors are beginning to ask whether this rally needs a breather,” said Vested Finance.
Looking ahead, market direction is likely to be shaped by the release of the minutes from the Federal Reserve’s latest policy meeting, due on Wednesday.
Crude oil prices cool after steady rally
Crude oil prices eased in Tuesday’s trade following US President Trump’s post on Truth Social.
West Texas Intermediate (WTI) crude futures slipped $2 to $102 per barrel, while Brent crude futures fell 1% to $111 per barrel. However, Brent continued to hover around the $110 mark and remained more than 50% higher compared to levels seen before the conflict escalated.
Crude prices had rallied sharply over the past week amid stalled US-Iran negotiations and continued disruptions to shipping activity through the Strait of Hormuz, a critical global energy transit route.
According to domestic brokerage firm Kotak Securities, concerns surrounding Iran’s nuclear programme and the ongoing blockade continue to support elevated risk premiums in global oil markets.
The US has also issued a temporary waiver permitting sales of Russian crude already loaded onto tankers, offering limited near-term supply relief. Going forward, the brokerage said any diplomatic progress could trigger profit booking in crude prices.
However, unresolved disruptions in the Strait of Hormuz and persistent geopolitical tensions are likely to keep oil prices volatile and fundamentally supported in the near term.
US stocks in focus
NVIDIA shares slipped to $219 ahead of its earnings release on Wednesday, while Walmart traded with mild losses. Among other premarket movers, cloud services firm Akamai Technologies fell 3.8% after announcing a $2.6 billion convertible bond offering.
Shares of Micron Technology were also down 2% before the opening bell. Meanwhile, The Home Depot shares edged higher after the company reported its first-quarter results.
Blackstone and Alphabet shares advanced after the former announced plans to invest $5 billion in equity capital into a new artificial intelligence infrastructure company in partnership with Google.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
