Dow futures slip as investors eye US inflation amid Iran tensions

Dow futures slipped 0.30% to about 50,750 during European trade as investors balanced rising geopolitical tensions in the Middle East with an upcoming US inflation report. S&P 500 futures fell about 0.40% to roughly 7,360 and Nasdaq 100 futures were down about 0.61% near 28,950.

Iran’s Islamic Revolutionary Guard Corps launched a drone strike on the US Fifth Fleet in Bahrain, describing the action as retaliation for recent US strikes in southern Iran and warning of harsher measures if the parties continued what it called aggression. The drone strike contributed to increased geopolitical risk in markets.

US forces carried out a third round of retaliatory strikes on Iranian coastal targets on Wednesday after Iran launched three ballistic missiles from Isfahan, according to officials. The exchanges follow an incident on Tuesday when US forces responded to Iran’s downing of a US helicopter gunship near the Strait of Hormuz.

Traders were also focused on US consumer inflation data due Friday. Economists forecast the May annual consumer price index will rise to 4.2% from April’s 3.8%, with monthly prices expected to increase 0.5%. If confirmed, the annual reading would be the highest since April 2023.

During Tuesday’s regular US session, the major indexes moved unevenly. The Dow Jones Industrial Average rose 0.17%, the S&P 500 fell 0.26% and the Nasdaq declined 0.97%. Technology-related names underperformed; the iShares Semiconductor ETF dropped more than 3%.

Precious metals weakened. Gold fell more than 1% on Tuesday, moved lower overnight and hit a low of $4,180, leaving the metal over 25% below its peak for the year. Silver (XAG) declined to $64 from a year-to-date high of $121, its lowest level since March 24.

Market participants indicated they would monitor incoming economic releases and further developments in the Middle East for trading direction.