S&P futures exhibited a mixed performance on Thursday as equity markets endeavoured to recover amidst escalating U.S.-Iran tensions and a significant increase in oil prices. S&P 500 futures exhibited an increase of 0.2%, whereas futures associated with the Dow Jones Industrial Average remained relatively unchanged. Nasdaq 100 futures, conversely, increased by 0.61%, driven by the strong performance of semiconductor stocks. The VanEck Semiconductor ETF climbed 1.8%, led by a 3.4% gain in Micron. Sandisk experienced an increase of 2.4% as well. European equities experienced a rebound on Thursday as market participants kept a close watch on escalating tensions in the Middle East.
The pan-European Stoxx 600 index recorded a modest increase of 0.1%, while regional exchanges and sectors exhibited a varied performance. In Asia, Japan’s Nikkei 225 closed 1.4% higher, while South Korea’s Kospi rose 0.62% in choppy trade. Hong Kong’s Hang Seng index experienced a decline of 0.5% during the final hour of trading on Thursday, whereas mainland China’s CSI 300 concluded the session with an increase of 2.5%. The U.S. initiated new military actions against Iran following Tehran’s assaults on commercial vessels in and near the Strait of Hormuz, as reported by U.S. Central Command on Wednesday afternoon. However, crude futures remained unchanged following President Donald Trump’s announcement that he had reached out to Iran to negotiate a deal.
This follows Trump’s statement on Wednesday indicating a potential lack of interest in pursuing negotiations with Iran. Before that, he stated that the ceasefire between the U.S. and Tehran is “over” following yet another wave of attacks in the Middle East. “Any assumption of a swift return to normalized Persian Gulf exports is certainly being challenged,” said Mason Mendez. “Given the reduced supply buffer of already low global reserves and inventories, any further escalations are likely to re-enforce a higher geopolitical risk premium in oil prices – even when negotiations eventually resume.”
The Dow experienced a significant decline on Wednesday, reflecting the heightened tensions between Iran and the U.S. The S&P 500 experienced a modest decline, whereas semiconductor stocks rebounded, contributing to an increase in the Nasdaq index. “These renewed geopolitical risks could fuel near-term risk-off sentiment, however, trends of strong equity earnings momentum and ongoing AI strengths will likely continue to drive the S&P 500 Index towards our year-end target range of 7,800 to 8,000,” said Mendez.