U.S. stock futures were trading higher on Thursday, suggesting a tentative recovery on Wall Street after equities suffered a sharp decline the previous session amid rising inflation pressures and renewed military strikes in the Middle East.
By 03:13 ET (07:13 GMT), futures tied to the major U.S. indexes were firmer: the Dow futures contract had risen by 215 points, or 0.4%, S&P 500 futures had gained 38 points, or 0.5%, and Nasdaq 100 futures were up 230 points, or 0.8%. The futures uptick followed a day in which the cash market indices delivered some of their steepest moves in months.
On Wednesday, the Dow Jones Industrial Average posted its worst session since October, sliding 1.9%. The Nasdaq Composite, which is more heavily weighted toward technology issues, dropped 2%, while the S&P 500 fell 1.6% to close at its lowest level in five weeks. Market participants attributed much of the selling to a combination of geopolitical tensions and an intensification of U.S. inflation measures.
Geopolitical escalation and inflation data
Investors were responding to an uptick in hostilities after the United States and Iran exchanged air strikes for a second consecutive day. U.S. Central Command, or CENTCOM, said its strikes targeted multiple military sites in Iran and described the operations as "self-defense" in response to the downing of a U.S. helicopter in the Strait of Hormuz. CENTCOM later said it had concluded the round of strikes.
Iran mounted retaliatory strikes against several U.S. military bases and allied positions across the Gulf region, and media outlets reported explosions in locations including Kuwait, Bahrain, and Jordan, though those reports lacked immediate official confirmation in some cases. The heightened fighting combined with a sharp rise in a U.S. consumer price inflation metric to deepen investor concern about a potential stagflationary mix of stagnant growth and rising prices.
Analysts at Deutsche Bank commented that, with signs of a near-term diplomatic resolution fading, "investors grew more concerned about the stagflationary scenarios again, with bonds and equities selling off on both sides of the Atlantic." The interplay between renewed fighting and a hotter inflation reading was cited as a key driver behind the prior session's relative indiscriminate selling.
Oil reacts to mixed signals
Energy markets briefly priced in a larger supply risk after the latest strikes and a Tehran announcement that it had stopped all vessel traffic through the Strait of Hormuz - a claim the U.S. military denied. Early in Asian trading, both Brent and West Texas Intermediate crude rose more than 2% before trimming gains.
As of 03:30 ET, Brent crude futures for August delivery were down 0.6% at $92.59 per barrel, while WTI futures fell 0.5% to $89.58 per barrel. Both contracts had traded higher earlier in the session and had settled nearly 2% higher in the previous session. Prices pulled back later after media reports suggested that U.S.-Iran peace talks may have continued overnight; CNN, citing a diplomatic source, reported talks had been held, though the report was unverified at the time.
Technology and AI-related financing concerns
Investor anxiety over the economics of the artificial intelligence build-out also weighed on market sentiment. Shares of Super Micro Computer plunged after the server maker sought new equity in the markets, marking another example of AI-linked companies coming to investors for large capital raises. Analysts have flagged a trend of big fundraising by infrastructure providers as a potential signal that companies face heavy costs to construct the data centers and servers needed to support AI workloads.
Oracle's results added to the disquiet. The company reported quarterly revenue and earnings that beat expectations and lifted its annual adjusted profit-per-share outlook. Yet despite the top- and bottom-line beat, Oracle stock fell in extended trading after management disclosed plans to raise substantial financing for its AI ambitions.
Oracle said it expects to raise $40 billion in financing in fiscal full-year 2027. The announcement followed commentary that the firm is facing a period of substantial cash outflows as it invests in cloud computing infrastructure to support growing AI-related demand. Analysts at Vital Knowledge described the report as "an OK release with continued robust growth in backlog, and the cash performance wasn’t as bad as feared (thanks to lower capex). But the company is still facing a period of heavy cash outflows as it builds the infrastructure needed to fulfill its backlog, and this will require more debt and equity."
Oracle, headquartered in Austin, Texas, has expanded its focus toward cloud infrastructure in recent years, even as its traditional database and enterprise software products continue to generate revenue. The sizable financing plan to underwrite data-center expansion appears to have heightened investor scrutiny of the company's balance-sheet strategy as it seeks to be a major provider of capacity for AI workloads.
ECB decision looms
Across the Atlantic, the European Central Bank was widely expected to raise interest rates at the conclusion of its two-day policy meeting. Policymakers face the challenge of containing a wave of energy-driven inflation tied in part to the Iran conflict, while doing so against a backdrop of weak growth in the 21-member euro area.
Eurozone inflation has been tracking above 3%, surpassing the ECB’s 2% target, which supports the case for a rate increase. Market expectations centered on a rise in the ECB’s key deposit rate to 2.25% from 2.0%.
Yet ECB officials are likely to be attentive to the growth outlook when shaping their message. ING analysts noted that activity indicators were already showing strains, citing a weak print for German factory orders and warning that eurozone manufacturing could now start to deteriorate after earlier hoarding and inventory building around the uncertainty of the Gulf conflict.
What to watch next
- Producer price growth data scheduled for release later in the week could add clarity to inflation trajectories and influence both equity and fixed-income markets.
- Further developments in U.S.-Iran military actions or any confirmations around reported overnight talks will likely sway oil prices and risk appetite across global markets.
- Market reaction to Oracle’s funding plans and the broader appetite for heavy capital raises among AI infrastructure providers will remain a focal point for technology and enterprise software stocks.
In short, markets navigated a complex mix of geopolitical risk, inflation pressure and industry-level financing dynamics. The confluence of these factors produced a sharp selloff in the previous session and left futures attempting a modest rebound as investors weighed the near-term trajectory of inflation, energy prices, and corporate capital needs.