Dow Jones futures fell 0.3% as traders weighed the US-Iran war against the outlook for Federal Reserve policy. The slide put pressure on index futures before the afternoon session and kept attention on the next policy clues from the Federal Reserve.
Dow, S&P 500, Nasdaq 100
Contracts on the S&P 500 inched down 0.1%, while Nasdaq 100 futures slipped 0.2%. That left traders marking a weaker open after Tuesday's session, when the Dow dropped more than 100 points after briefly reaching a record intraday high.
The S&P 500 fell 0.5% and the Nasdaq Composite lost 1.2% on Tuesday. Semiconductor stocks led the decline, a sharper move than the broad index numbers alone suggest, because the group tends to carry heavy weight in the Nasdaq complex.
Iran, Treasury, West Texas Intermediate
Late Tuesday, American forces carried out a series of powerful strikes against Iran after attacks on three commercial vessels in the Strait of Hormuz. The Treasury also revoked a license that had allowed Iran to export oil globally, and crude prices climbed more than 2% in response.
West Texas Intermediate traded above $72 a barrel, while Brent jumped over 3% to trade at 74 dollars. Kevin Warsh, Chairman of the Federal Reserve, held interest rates steady at his first meeting, so the next round of minutes gives traders a fresh read on how long policy makers may keep the current stance.
Fed's June meeting minutes
Wednesday afternoon's release of minutes from the Fed's June meeting is the immediate test for equity futures. If the document leans more cautious on inflation or growth than traders expect, the gap between risk assets and policy hopes can widen quickly.
The move matters most for traders who were already balancing a soft start in futures against a volatile oil tape. A weaker open in Dow Jones futures leaves little room for a complacent read on Iran or on what the Fed may do next.
