US stock futures slipped early Wednesday as traders weighed the US-Iran war against the Federal Reserve's next move. Contracts on the Dow, S&P 500 and Nasdaq 100 all wavered below the flatline ahead of the June Fed minutes.
Wall Street opened the Wednesday session on the back foot. Futures tied to the Dow, the S&P 500 and the Nasdaq 100 each wavered below the flatline, with Dow futures down 140 points, or 0.26%, at 53,057. The pullback extended a cautious tone from the prior day rather than breaking from it.
Tuesday's decline sets the tone
Tuesday's cash session already turned lower after a strong start. The Dow dropped more than 100 points after briefly reaching a record intraday high, a reversal that captured the market's hesitation. The broader tape followed, as the S&P 500 fell 0.5% and the Nasdaq Composite lost 1.2%.
Technology weighed on the tape. Semiconductor stocks led the decline, and the Nasdaq's 1.2% drop outpaced the Dow and S&P 500.
Geopolitics and the Fed pull in different directions
The immediate driver sits overseas. Markets are digesting a sharp escalation in Iran tensions after American forces carried out strikes against Iran late Tuesday, a development that has kept risk appetite in check. The war adds a layer of uncertainty that equity traders cannot easily price.
At the same time, attention turns to policy. Investors are waiting on the Wednesday afternoon release of minutes from the Fed's June meeting, searching for clues on the path of interest rates. Those minutes follow a meeting where the Fed held interest rates steady at Chairman Kevin Warsh's first meeting.
A single-name wobble on the Nasdaq
One newly listed name added to the Nasdaq's soft session. SpaceX stock dropped below its IPO price after inclusion in the index let early investors sell shares to funds. Even so, coverage stayed constructive, with JPMorgan Chase setting a $225 price target and Morgan Stanley a Street-high $300 target.
With the Fed minutes still ahead and the Iran situation unresolved, US indices head into the session searching for direction.
Source: Yahoo Finance
Trading involves risk.
Risk Disclaimer
