Nasdaq 100 futures slide 1% as Iran tensions lift oil prices

Nasdaq 100 futures dropped more than 1% overnight as oil held above $90 a barrel after renewed US-Iran tensions.

"Markets adopted a generally risk-off tone as Trump reaffirmed he was not interested in extending the truce with Iran, with renewed tensions in the Middle East pushing oil prices higher and complicating sentiment," Westpac analysts wrote in a research note.

S&P 500 futures fell 0.52% and Dow futures declined 0.21%, extending Monday's losses when the S&P 500 closed down 0.52% at 7,745.06, the Dow shed 0.51% to 53,459.78 and the Nasdaq Composite slipped 0.32% to 26,644.91. Brent crude rose 0.51% to $91.33 a barrel while WTI gained 0.64% to $85.04. The 30-year Treasury yield climbed to 5.31%, its highest level since 2007, while the 10-year yield stood at 4.724%.

The disproportionate decline in tech-heavy futures points to continued pressure on growth stocks as investors weigh the inflation implications of higher oil prices against the Federal Reserve's policy path. Markets will turn to the Fed's July meeting minutes Wednesday, followed by earnings from Home Depot Tuesday, Target Wednesday and Walmart Thursday.

Trump told Fox News on Monday he would "bomb the shit out of" Oman if it impeded efforts to end the war against Iran and reopen the Strait of Hormuz, comments that came as a two-month window to negotiate a peace deal expired without a breakthrough. The president reiterated on Truth Social that "the number one Goal is, and always will be, that Iran cannot have, in any way, shape, or form, a Nuclear Weapon."

Rising oil prices have complicated the Fed's outlook, with traders pricing a 31 percent chance of a 25-basis-point rate hike in September, down from roughly even odds a week earlier, according to the CME FedWatch Tool. The dollar index slipped 0.1% to 99.57, while spot gold fell to $4,396.09 an ounce. "Gold, silver, oil, precious metals mining stocks, and bond yields all rose today as the S&P 500 fell. The inflation trade is on and Fed credibility is off," economist Peter Schiff said on X.

Stocks in Focus

Sandisk shares slumped more than 4% in overnight trading as investors weighed the sustainability of the AI-driven rally in memory chips, a reversal after the stock led Monday's gains with a 10% advance. Strategy, formerly MicroStrategy, drew retail attention after selling about 3.5 million shares through its at-the-market program, generating more than $333 million in net proceeds. Nebius Group fell more than 2% overnight despite upbeat second-quarter results that drew a slew of analyst price-target increases.

Nike, the worst-performing Dow stock Monday with a 4.5% decline, hit a 52-week low of $38.86 and is down about 39% since the start of the year. A Stocktwits poll found 68% of retail traders favored Nike as the stronger turnaround opportunity compared with Lululemon Athletica.

The SPDR S&P 500 ETF, Invesco QQQ Trust and SPDR Dow Jones Industrial Average ETF all traded lower in overnight action. Asian markets were mixed at the open Tuesday, with South Korea's KOSPI, Japan's Nikkei 225 and China's SSE Composite in the red while Australian stocks climbed.

This article is for informational purposes only and does not constitute investment advice.