Wall St futures slip as Iran war rages on, investors dial down rate cut bets
Why it matters: Geopolitical turmoil in Iran is driving oil prices up and pushing investor rate cut expectations years away.
- Wall Street futures are down across the board, with the S&P 500 and Dow on track for their fourth consecutive weekly decline, while the Russell 2000 briefly entered correction territory.
- Crude prices have reversed recent losses, with Brent crude up 1.7% to over $110 a barrel, driven by the ongoing conflict in Iran and potential U.S. intervention.
- Investors are increasingly skeptical of imminent interest rate cuts, pushing their bets for a quarter-point reduction from December 2026 to sometime in 2027, despite central bank acknowledgments of the conflict's impact.
- FedEx provided a rare bright spot, with its shares rising 10% premarket after reporting upbeat results and a steady global demand outlook, even as fuel costs surge.
- The CBOE volatility index (VIX), Wall Street's 'fear gauge,' edged up 1.72 points to 25.78, reflecting heightened market anxiety.
- Energy stocks continue their strong performance, with the S&P 500 sector index set for its thirteenth straight week of gains, benefiting from geopolitical events in the Middle East and Venezuela.
- Super Micro Computer tumbled 23% following charges against individuals for allegedly smuggling $2.5 billion of U.S. AI technology to China, highlighting export control risks.
Wall Street futures are slipping as escalating tensions in Iran, including potential U.S. military action around Kharg Island, fuel a surge in crude prices and investor caution. Despite some positive corporate news from FedEx, the broader market is reflecting increased fear and a significant dialing back of expectations for interest rate cuts, with traders now pushing bets to 2027.
