U.S. stock futures fell Friday amid growing concerns over possible American military action in the escalating Israel-Iran conflict. President Donald Trump announced a self-imposed two-week deadline to decide on U.S. involvement, adding uncertainty to an already cautious market.
Dow Jones Industrial Average futures dropped more than 150 points, or 0.4%, while S&P 500 futures slipped 0.2%, and Nasdaq 100 futures edged down 0.1%. The market was closed Thursday for Juneteenth, giving investors a brief pause before digesting fresh geopolitical risks.
Tensions between Israel and Iran remain high. The White House press secretary, speaking on behalf of Trump, said a decision on military action would come within two weeks. Meanwhile, Iran’s foreign minister indicated no room for negotiations until Israeli attacks cease, keeping diplomatic hopes uncertain.
The conflict has pushed oil prices higher. Brent crude and West Texas Intermediate futures rose about 2%, reflecting fears that the Iranian-controlled Strait of Hormuz—a vital passage for one-fifth of the world’s oil—could be blocked. Iran has increased oil exports to safeguard revenue amid potential supply disruptions.
Oil prices surged nearly 3% Thursday after Israel targeted Iranian nuclear sites and Iran retaliated with missile and drone strikes, including an attack on an Israeli hospital. Analyst Phil Flynn noted that tanker rates have doubled, and ships are avoiding the Strait of Hormuz, sustaining upward pressure on oil prices.
On the economic front, markets are also digesting Federal Reserve Chair Jerome Powell’s recent remarks. After the Fed left interest rates unchanged, Powell said future rate decisions will depend on economic data. Most traders expect a rate cut by September, though Trump criticized Powell, blaming him for economic harm caused by high rates and calling him “one of the dumbest” government officials.
Investors will watch new economic reports Friday, including the Philadelphia Fed’s June manufacturing index and the Conference Board’s Leading Economic Indicators for May, for clues on the economy’s direction.
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