Dow, Nasdaq, S&P 500 Futures Climb Amid US-Iran Tensions, Fed Inflation Worries: WULF, CMPS, ANET, PENG Stocks In Focus

U.S. stock futures edged higher in the overnight session on Wednesday as markets assessed risks from the U.S.-Iran war and the Federal Reserve’s inflation concerns.

• The U.S. began fresh strikes on Iran on Wednesday, retaliating to Tehran’s attacks in the Strait of Hormuz.
• Earlier, U.S. President Donald Trump had indicated that he may not be looking at negotiating a deal with Iran after the latest tensions in the Strait.
• Oil prices climbed higher amid the tensions.

U.S. stock futures climbed in the overnight session late Wednesday, reversing a sell-off triggered by rising tensions between the U.S. and Iran after President Donald Trump said that the interim deal to end the war with Iran was "over."

Nasdaq 100 futures rose 0.19%, S&P 500 futures climbed 0.08%, while Dow futures were up 0.10%  at 9:12 PM EDT.  

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ), and the SPDR Dow Jones Industrial Average ETF Trust (DIA) were all trading higher at the time of writing, with sentiment in the green.

The iShares 20+ Year Treasury Bond ETF (TLT) was trading down 0.12% amid ‘extremely bearish’ sentiment.

How Did US Markets Fare On Wednesday?

The benchmark indexes closed mixed on Wednesday amid the escalating conflict in the Middle East and the Federal Reserve’s June minutes that showed growing concerns over inflation among policymakers.

The Dow Jones Industrial Average shed more than 570 points, closing down 1.09%. The S&P 500 declined 0.28%, while the Nasdaq rose about 51 points to end 0.2% higher, bolstered by a rise in semiconductor stocks.

Index	Move	Close
Dow Jones Industrial Average	-1.09%	52,348.39
S&P 500	-0.28%	7,482.71
Nasdaq Composite	0.20%	25,870.65

US Market Drivers

U.S. stock markets shed gains from earlier in the week following escalating tensions between the U.S. and Iran, signaling a possible end to the peace negotiations between the two countries.

Conflict increased after Iran attacked three commercial ships passing through the Strait of Hormuz earlier this week, following which the U.S. initiated strikes against the Middle Eastern country and revoked a previous license that had lifted sanctions on Iran's oil.

The U.S. began fresh strikes on Iran on Wednesday, retaliating to Tehran’s attacks in the Strait of Hormuz that threatened to disrupt the passage of ships through the critical waterway once again.

“At the direction of the Commander in Chief, U.S. Central Command forces have started conducting additional strikes against Iran to further degrade their ability to threaten freedom of navigation in the Strait of Hormuz,” the U.S. Central Command said Wednesday in a post on X.

“The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews freely navigating a vital international waterway,” it added.

Earlier, President Donald Trump had indicated that he may not be looking at negotiating a deal with Iran after the latest tensions in the Strait.

Prior to that, at a NATO summit in Turkey, when asked about the memorandum of understanding with Iran, Trump said, "It's ​a very interesting question. To me, I think it's over. I don't want to deal with them."

Further, in a post on Truth Social, Trump shared a video clip of a bombing in Chabahar, Iran, adding that, “This is in retribution for yesterday’s bombing of ships by Iran. If it happens again, it will get much worse!”

“The United States is playing with fire in Iran. Continued escalation, instead of rational diplomacy, has risks that could become catastrophic,” Brett Erickson, managing principal at Obsidian Risk Advisors, said in a post on X.

Meanwhile, inflation concerns intensified at the Federal Reserve's June meeting, as per the minutes released on Wednesday. The notes showed that policymakers are increasingly worried that price pressures are spreading beyond a handful of sectors and could require tighter monetary policy.

While officials unanimously kept interest rates unchanged, a few participants argued that there was already a case for a rate hike. As the minutes noted, "upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit," adding that a few participants felt “there was a case for raising the target range for the federal funds rate, but those participants indicated that they supported maintaining the current target range at this meeting.

Markets will be looking out for the weekly jobless claims report and existing home sales expected later in the day. Meanwhile, PepsiCo. will also post its quarterly results before the bell.

Trending Stocks To Watch

TeraWulf Inc. (WULF): Shares of the company soared nearly 13% at close and continued to climb overnight on Wednesday after Morgan Stanley raised its price target on the stock to $72 from $66.50, while keeping an ‘Overweight’ rating.

COMPASS Pathways (CMPS): The biotechnology company’s shares jumped more than 7% at close on Wednesday amid a series of price target updates and Wall Street optimism over its positive 26-week data from the second late-stage trial of COMP360 in treatment-resistant depression.

Arista Networks Inc. (ANET): The stock jumped onto the retail radar after closing up nearly 9%, as AI-driven demand for the company has boosted optimism.

Penguin Solutions Inc. (PENG): This AI company also saw its shares soar over 25% at close amid a series of Wall Street price target hikes as analysts see it benefiting further from continued AI demand.

Global Market Trends

Crude oil prices soared on Wednesday, climbing overnight as concerns about oil prices resurfaced after fresh strikes in Iran. At the time of writing, Brent crude futures expiring in August were up nearly 1%, trading at around $78.77 per barrel. Meanwhile, WTI crude futures expiring in August rose by about 0.88% to $74.17 per barrel.

“Heading into Thursday, oil prices likely will be top of mind,” Mason Mendez, global real assets analyst at Wells Fargo Investment Institute, reportedly told CNBC.

Yields on the 10-year Treasury rose to 4.579% at the time of writing, while spot gold prices declined to around $4,074.18 an ounce.

Asian markets were trading mixed at the open on Thursday. South Korea's KOSPI and Japan’s Nikkei 225 edged higher at the time of writing. However, China’s SSE Composite index and Australian stocks were trading lower at the open.

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