The US stock futures traded mixed on Tuesday, 14 July, after suffering sharp losses in the previous session, as rising energy prices reinforced expectations of a US Federal Reserve interest rate hike, while investors remained cautious ahead of the release of key US inflation data.
S&P 500 futures were little changed, while Nasdaq 100 futures rose 0.5%, supported by a rebound in South Korea’s memory chip stocks, which lifted sentiment across the semiconductor sector.
Meanwhile, Dow Jones Industrial Average futures were largely unchanged from their previous close.
Tensions in the Middle East escalated further on Tuesday after the US launched a fresh wave of strikes on Iran, a day after US President Donald Trump announced that the United States would impose a 20% fee on all cargo passing through the Strait of Hormuz. Trump also said the US would reinstate its blockade on Iranian vessels transiting the strategic waterway.
Since the conflict erupted in late February, the Strait of Hormuz has emerged as the epicenter of the confrontation, with both the US and Iran seeking to assert control over the vital maritime route, which accounts for nearly 25% of global crude oil exports and is critical to Asian energy supplies.
Although shipping traffic briefly resumed following the interim peace agreement, the latest escalation has once again disrupted vessel movements through the Strait, raising fresh concerns over global energy supplies.
Renewed tensions in the Middle East come at a pivotal time for markets as investors brace for the start of earnings season, with Goldman Sachs Group Inc. and JPMorgan Chase & Co. due to report Tuesday. The results will mark the first major test of whether corporate earnings can justify a rally fueled by optimism over artificial intelligence.
In a sign of confidence that the artificial intelligence (AI) buildout will continue to fuel demand for chips, Samsung Electronics Co. is exploring a potential offering of American depositary receipts (ADRs), Bloomberg reported, citing people familiar with the matter.
Domestic brokerage firm, Vested Finance said investors are remaining on the sidelines ahead of three key market-moving events: the US inflation report, Federal Reserve Chair Kevin Warsh’s testimony before Congress, and earnings from the largest US banks.
“After inflation accelerated between March and May, economists expect price pressures to ease slightly in June. The data could play a crucial role in determining whether the Federal Reserve keeps interest rates unchanged or considers another rate hike later this year,” the brokerage said.
Crude oil prices extend rally
Crude oil prices extended their gains, with Brent crude futures rising another $4.25 per barrel to $87.55 after surging 10% in the previous session. The two-day rally has lifted Brent’s weekly gains to 13.7%, putting it on track for its first double-digit weekly advance in four months. This level was seen a month ago.
WTI crude futures also built on their recent gains, climbing $3.11 per barrel to $81.25.
The sharp rebound in crude oil prices has heightened inflation concerns at a time when consumer prices in several major economies are already running above central bank targets, complicating the task for policymakers.
The US Federal Reserve has recently indicated that inflation remains broadly under control. However, most policymakers have continued to signal at least one interest rate hike this year to ensure inflation returns to its target.
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