- Dow Jones futures fall as sentiment turns cautious amid fading hopes of a Middle East conflict resolution.
- Iran reportedly rejected the US 15-point plan, proposing five conditions instead.
- TD Securities strategists say the Fed faces mixed signals as the conflict-driven oil shock complicates the outlook.
Dow Jones futures decline 0.39% below 46,550 during European hours, ahead of the United States (US) regular market open on Thursday. Meanwhile, S&P 500 and Nasdaq 100 futures fall 0.40% and 0.44% to near 6,610 and 24,250, respectively, at the time of writing.
US stock futures move lower as market sentiment turns cautious amid diminishing hopes for a resolution to the Middle East conflict. Iran has reportedly rejected the United States’ 15-point proposal to end the war, instead outlining five conditions that include guaranteed compensation for war damages and sovereign control over the Strait of Hormuz. Meanwhile, the Israeli Defense Forces (IDF) said in a post on X that it has carried out a series of strikes on Isfahan in central Iran, signaling further escalation.
TD Securities strategists Oscar Munoz and Eli Nir said the Federal Reserve (Fed) is facing mixed signals as the conflict-driven oil shock complicates the outlook. They noted that the US economy remains uneven, with inflation and growth dynamics pulling policy in different directions. As a result, they expect the Fed to stay on hold in the near term, while leaving room for potential rate cuts later in 2026 if conditions evolve favorably.
However, US equities ended higher on Wednesday. The Dow Jones rose 0.66%, the S&P 500 gained 0.54%, and the Nasdaq 100 advanced 0.77%, supported by a pullback in oil prices. Investors now turn their attention to weekly Initial Jobless Claims and speeches from several Fed officials.
