U.S. stock index futures fell in the early hours of Wednesday as a broader conflict in the Middle East showed few signs of ceasing, with investors fretting over the inflationary effects of a prolonged war.
Futures deepened losses during the Asian session, as a sharp selldown in South Korean markets-- where the KOSPI slumped as much as 12%-- rattled investor sentiment, especially towards chipmaking and artificial intelligence-exposed stocks.
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S&P 500 Futures fell 0.5% to 6,789.75 points by 00:10 ET (05:10 GMT). Nasdaq 100 Futures fell 0.7% to 24,581.0 points, while Dow Jones Futures fell nearly 0.4% to 48,383.0 points.
Futures retreated after a negative session on Wall Street, with all three benchmarks clocking deep losses as risk appetite remained frail. Growing caution before a host of key economic readings due this week also weighed.
Iran conflict set to enter fifth day, inflation concerns build The U.S., Israel, and Iran conflict is set to enter its fifth consecutive day on Wednesday, with strikes against Tehran continuing into the late hours of Tuesday.
Iran retaliated by targeting several Gulf countries with ties to the U.S., and had struck the American embassy in Saudi Arabia earlier in the day.
The conflict’s inflationary effects were a key point of concern for markets, given that a prolonged war could greatly disrupt global energy supplies, driving up oil and gas prices. Oil prices rose sharply this week on expectations of supply disruptions.
A prolonged rally in oil is expected to drive up global inflation, hampering economic growth and eliciting a more hawkish stance from major central banks.
President Donald Trump attempted to stabilize oil markets on Tuesday by calling on insurers to provide political risk coverage for maritime trade in the Gulf. Trump also said the U.S. Navy could begin escorting oil tankers through the Strait of Hormuz if necessary.
While Brent oil futures did curb some gains after Trump’s comments, it was still trading up 12% this week.
Wall Street indexes broadly fell on Tuesday as concerns over a prolonged conflict persisted, although they did end above session lows. The S&P 500 fell 0.9% to 6,816.63 points, the NASDAQ Composite fell 1% to 22,516.69 points, while the Dow Jones Industrial Average fell 0.8% to 48,501.27 points.
Chipmaking stocks slide on memory chip turmoil Major chipmaking stocks had fallen sharply on Tuesday, with memory chip makers bearing the brunt of losses amid increasing uncertainty over the sector.
Losses in chipmakers came after Research firm IDC warned that the global smartphone market faces its biggest ever year-on-year decline in 2026, spurred by a major shock originating in memory chip markets.
This stems from a severe shortage of consumer-grade memory chips, as major manufacturers including Micron and Samsung shift focus towards higher-margin artificial intelligence chips.
Micron Technology Inc (NASDAQ:MU) slid nearly 8%, while Samsung Electronics Co Ltd (KS:005930) tumbled over 9% in South Korean trade on Wednesday.
