U.S. Stock Futures Drop on Middle East Concerns; Fed Meeting and Retail Sales Data on the Horizon
U.S. stock index futures declined early Tuesday amid renewed concerns over the escalating Israel-Iran conflict, just ahead of key U.S. economic data and the start of the Federal Reserve’s two-day policy meeting.
As of 05:15 ET (09:15 GMT), Dow Jones futures were down 270 points (-0.6%), S&P 500 futures fell 36 points (-0.6%), and Nasdaq 100 futures slipped 125 points (-0.6%).
This follows a strong session on Monday, where Wall Street’s major indices closed higher on easing fears related to recent airstrikes in the Middle East. The S&P 500 gained 0.9%, the Nasdaq Composite climbed 1.5%, and the Dow Jones Industrial Average added 0.8%.
However, risk appetite faded after former U.S. President Donald Trump called for the evacuation of Tehran via social media, signaling escalating hostilities. He also reiterated his opposition to Iran enriching uranium, rejecting Tehran’s stance that it has no intention of developing nuclear weapons.
Trump’s early departure from the G7 summit in Canada, which he described as unrelated to a ceasefire but tied to a “much bigger” issue, added to the uncertainty. Prior to his exit, G7 leaders issued a statement backing Israel and citing Iran as a destabilizing force in the region.
Focus Turns to Economic Data and Fed Decision
Aside from geopolitical developments, investors are closely watching Tuesday’s U.S. retail sales and industrial production reports for signals on how consumers and businesses are coping with rising tariffs. Weak data could heighten fears about the health of the U.S. economy.
Later in the day, the Federal Reserve will begin its two-day meeting, with no rate change expected. However, markets will pay close attention to Chair Jerome Powell’s comments on the future policy path, particularly in light of recent inflation data and ongoing economic resilience.
BoJ Holds Steady, Signals Slower Tapering
Earlier Tuesday, the Bank of Japan left interest rates unchanged, as anticipated, and indicated it will slow the pace of bond tapering starting in the next fiscal year.
Amazon Extends Prime Day, Biotech Stock Surges
In corporate news, Amazon (AMZN) announced that its annual Prime Day event will run from July 8 to July 11—extended to four days based on customer feedback. “Our members told us they just need more time to shop the deals,” said Jamil Ghani, VP of Worldwide Prime.
Meanwhile, Verve Therapeutics (VERV) surged over 70% in premarket trading following a report by the Financial Times that Eli Lilly (LLY) is nearing a $1.3 billion acquisition of the biotech firm.
Oil Prices Rise Amid Conflict, IEA Forecast
Crude prices gained on Tuesday as traders digested Middle East developments and a new forecast from the International Energy Agency (IEA).
As of 05:15 ET, Brent crude was up 1.4% at $74.25 per barrel, while WTI rose 1.4% to $71.22.
The IEA stated global oil demand will continue rising until 2029—despite a projected peak in Chinese demand in 2027—driven by lower fuel prices and slower electric vehicle adoption in the U.S.. Demand is expected to peak at 105.6 million barrels per day, while global production capacity is set to reach 114.7 million bpd by 2030.
Oil price volatility intensified following Trump’s call for an evacuation of Tehran, highlighting persistent geopolitical risks.