Wall Street Futures Fall, Oil Prices Rise After Trump Declares Iran Deal 'Over'

U.S. stock futures fell sharply on Wednesday morning, with investors moving away from riskier assets amid escalating tensions in the Middle East. At 8:36 AM ET, Dow futures had dropped 0.8%, while S&P 500 futures slipped 0.6% and Nasdaq 100 futures were down 0.8%.

The market downturn followed comments from President Donald Trump, who, speaking at a NATO summit in Turkey, declared a fragile interim peace deal with Iran to be "over." The president accused Tehran of violating the agreement, telling reporters, "We make a deal... As far as I’m concerned, it’s over."

Investor sentiment was already strained before the president's remarks. Earlier on Wednesday, Iranian armed forces reported attacking U.S. military sites in Kuwait and Bahrain. The attacks were described as retaliation for American strikes on targets in Iran and a U.S. decision to revoke a sanctions waiver on Iranian oil.

Ad

The renewed conflict pushed crude oil prices significantly higher, sparking concerns that rising energy costs could lead to inflation and complicate the U.S. Federal Reserve's monetary policy. According to market analysts, the developments are forcing investors to reintroduce a geopolitical risk premium into asset prices.

Traders are also awaiting the release of minutes from the Federal Reserve’s June policy meeting for further insight into the central bank's thinking on the economy and potential policy moves. The market's reaction comes as the major U.S. indexes finished lower in the previous session and as investors prepare for the start of the second-quarter corporate earnings season.