US stock futures traded with modest gains on Thursday, 9 July, as strong buying in semiconductor stocks offset concerns stemming from the latest escalation in the Middle East, although geopolitical tensions continued to cap the upside.
Futures tied to the S&P 500 rose 0.2%, while Dow Jones Industrial Average futures hovered around the flatline. Nasdaq 100 futures outperformed, advancing 0.61%.
In the previous session, Wall Street ended on a mixed note, with the Nasdaq Composite being the only major index to close higher, gaining 0.22% as buying emerged towards the end of the trading session.
Semiconductor stocks attracted strong buying interest in pre-market trade today after SK Hynix Inc. received robust demand for its offering of American depositary receipts (ADRs).
“Despite recent concerns around AI valuations, the broader market continues to view memory and semiconductor companies as key beneficiaries of the AI boom,” said domestic brokerage firm Vested Finance.
However, renewed tensions in the Middle East kept investors cautious amid concerns that any further escalation could disrupt energy supplies through the Strait of Hormuz.
The United States reportedly carried out fresh airstrikes on Iran, a day after US President Donald Trump declared the temporary ceasefire “over”. Iran, in turn, reportedly launched missile attacks targeting US military facilities in Bahrain, Kuwait and Qatar.
The conflict, which began in late February, continued until April before a ceasefire was announced. The subsequent interim peace agreement had reassured investors that both sides were keen to avoid a prolonged conflict. However, the latest attacks have once again raised doubts over the prospects for a lasting peace.
Meanwhile, minutes from the Federal Reserve’s June policy meeting showed that only a few policymakers favoured an interest rate hike, although officials expressed growing concern over inflationary pressures. Markets continue to price in at least one Fed rate hike by the end of 2026.
According to the CME FedWatch Tool, markets have raised the implied probability of a rate hike this year to around 87%.
Investors are now awaiting the latest weekly jobless claims and existing home sales data for further clues on the Federal Reserve’s policy path.
Crude oil eases after a sharp rally
Crude oil prices edged lower on Thursday after surging in the previous session. Brent crude, the global benchmark, slipped 1.6% to $76.75 per barrel after briefly climbing above $80 on Wednesday. Before the Iran conflict began, Brent was trading near $72 per barrel. The WTI crude futures also slipped 1.5% to $72.42 a barrel.
In the previous session, both Brent and WTI crude futures settled 5% and 4.4% higher after investors assessed Trump’s latest comments on the conflict and the US revoked a licence authorising the sale of Iranian oil, citing Tehran’s alleged attacks on vessels transiting the Strait of Hormuz.
The sharp rebound in oil prices has revived concerns over inflation and strengthened expectations that the Federal Reserve may need to tighten monetary policy further.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
