US futures dip as Iran strikes lift oil before PCE

U.S. stock futures slipped on Thursday after Tehran targeted a U.S. airbase and tensions around the Strait of Hormuz lifted oil prices more than 2%. Investors awaited the personal consumption expenditures inflation report due later in the day.

At 4:54 a.m. ET, Dow E-minis were down about 53 points, or 0.1%; S&P 500 E-minis fell 6.75 points, or 0.09%; and Nasdaq 100 E-minis dropped 63.5 points, or 0.21%. Oil prices climbed over 2% on the escalation. U.S. Treasury yields rose as markets factored in the potential impact of higher energy costs on inflation.

The developments followed fresh U.S. strikes and a public rejection by President Donald Trump of reports he was close to a compromise with Iran. Traders flagged the closure of the Strait of Hormuz as a source of concern, citing the risk of disruptions to global energy flows.

The PCE report, the Federal Reserve’s preferred inflation gauge, is scheduled for release later Thursday under Fed Chair Kevin Warsh. Money market pricing reflects expectations that the Federal Reserve will keep interest rates unchanged for the rest of the year, while traders still price a chance of a 25-basis-point hike in December.

Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, warned that “a stronger-than-expected inflation reading could increase expectations for tighter monetary policy.” Market participants will use the PCE data to reassess rate outlooks.

Despite the softer futures, all three major U.S. indexes closed at record highs on Wednesday. The S&P 500 was positioned for a ninth straight weekly gain, its longest streak since December 2023.

In premarket company moves, Marvell Technology shares fell about 2.2% after first-quarter results. Hewlett-Packard slipped roughly 1.4% after quarterly results and a warning that rising memory costs will pressure margins. Drone-related stocks rose after reports that the U.S. administration discussed providing funding to drone firms: Unusual Machines jumped about 33% in premarket trading, AeroVironment gained about 9.1%, and Kratos Defense & Security Solutions rose near 11.2%.

Investors will closely monitor the PCE reading and developments in the Middle East for any further disruptions to oil shipments through the Strait of Hormuz.