Dow futures slip 170 points as markets open cautiously

Dow futures fell 170 points, S&P 500 futures slipped about 0.29% and Nasdaq 100 futures lost roughly 0.34% in European trade as US equity futures opened the second half of the year on a cautious tone.

Markets reacted to stalled US‑Iran diplomacy in Doha. US envoys traveled to Qatar for mediated talks, and Iranian officials declined direct meetings. Negotiations proceeded through intermediaries rather than one‑on‑one sessions.

The Strait of Hormuz is a primary market risk. Any disruption there could push oil prices higher and affect inflation and bond yields, which in turn would put pressure on equity prices.

Rate markets moved more hawkish. The CME FedWatch tool showed roughly a 67% probability of a September rate increase. Higher interest rates raise discount rates used to value future earnings and reduce present valuations for growth stocks and higher‑multiple AI‑linked names.

Investors are watching appearances by Federal Reserve officials at upcoming global conferences for further guidance on policy.

Key economic reports this week include ADP private payrolls and the ISM manufacturing PMI on Wednesday, followed by the nonfarm payrolls report on Thursday. US markets will be closed Friday for a holiday.

In the prior session the Dow rose 0.26%, the S&P 500 gained 0.79% and the Nasdaq Composite climbed 1.52%. Semiconductor and AI‑related stocks led gains, with SanDisk up 10.9%, AMD up 7.7%, Marvell Technology up 7.3%, Intel up 6% and Nvidia up 2.6%.

Near‑term market direction will depend on developments in Doha, incoming labor and manufacturing data, and comments from Federal Reserve officials.