Wall Street futures declined on Thursday amidst ongoing Middle East conflict uncertainties and ahead of a summit between Presidents Donald Trump and Xi Jinping. US and Iranian leaders exchanged strong words at the UN General Assembly earlier this week, pushing Brent crude prices back above $100 a barrel. The yield on the 30-year Treasury bond reached its highest level since 2004, indicating investor caution and concerns about higher borrowing costs.
Despite an initial rally driven by AI stocks earlier in the week, the S&P 500 looked set to erase its gains, with futures falling 0.30% at one point. Nasdaq 100 contracts also dropped 0.58%, largely due to a selloff in technology stocks and chipmakers like Nvidia and Broadcom, which slipped over 1% each. The rise in Treasury yields pressured riskier assets, although some analysts noted that faith in the AI trade helped limit losses.
While some reports indicated that US and Iranian negotiators were exploring a phased agreement to end the conflict, potentially involving the reopening of the Strait of Hormuz in exchange for lifting US economic blockades and unfreezing Iranian assets, these discussions were described as exploratory and unfinalized. This diplomatic progress initially led to a narrowing of crude oil gains, but Brent crude still traded above $103-$104 a barrel, indicating persistent concerns over supply disruptions and the risk of conflict expansion.
