By Ragini Mathur and Utkarsh Hathi
May 21 (Reuters) – U.S. stock index futures turned lower on Thursday as oil prices surged following a Reuters report that Iran’s Supreme Leader Ayatollah Mojtaba Khamenei ordered the country’s near-weapons-grade uranium not be sent abroad, dampening peace talk hopes.
Brent crude futures jumped 1.8% to $106.93 a barrel after the report. [O/R]
Crude prices had eased earlier in the session on prospects of diplomatic progress as Pakistan stepped up efforts to accelerate U.S.-Iran talks. But the Reuters report rekindled concerns over Middle East tensions and the potential for prolonged disruption around the Strait of Hormuz.
The yield on the benchmark U.S. 10-year Treasury note rose to 4.607%, resuming its recent climb after snapping a three-day run of gains on Wednesday. A lack of meaningful progress towards reopening the Strait has added to inflation concerns, pushing up yields and weighing on equities.
Investors also parsed a fresh batch of corporate earnings. Walmart dipped 1.6% in premarket trading after the largest retailer globally maintained annual targets and forecast second-quarter profit below estimates against a strained U.S. economic backdrop.
Shares of Nvidia, the world’s most valuable company, were flat after the AI heavyweight forecast second-quarter revenue above Wall Street estimates and announced an $80 billion share repurchase program.
Its stock has jumped almost 20% so far this year but the pace of growth has slowed as investors believe Nvidia will face tougher competition, not only from Big Tech but also chip rivals including Intel and Advanced Micro Devices.
“The market’s attention is now focused on how long Nvidia can sustain this momentum,” said Dan Coatsworth, head of markets at AJ Bell. “Growing competition is a key factor weighing on investors’ minds, with Nvidia no longer in a one-horse race.”
At 07:21 a.m. ET, Dow E-minis fell 65 points, or 0.13%, S&P 500 E-minis dropped 16.25 points, or 0.22%, and Nasdaq 100 E-minis shed 105.5 points, or 0.36%.
Investors also monitored SpaceX after the company unveiled its IPO filing on Wednesday, giving the market its first glimpse into how much billionaire Elon Musk is spending on AI as he bets on transforming the rocket maker into a broader AI-led business.
In economic data, weekly jobless claims and business activity surveys are due later in the day and could offer fresh clues about the health of the economy.
Intuit shares fell 14% after the software maker lowered the annual revenue forecast for its tax-filing software, TurboTax, and said it would cut 17% of its full-time workforce.
Meanwhile, IBM climbed 6.3% after the Wall Street Journal reported the Trump Administration was awarding $2 billion in grants to nine quantum-computing companies, of which IBM would receive $1 billion.
GlobalFoundries was up 9.7%, D-Wave Quantum jumped 19.3%, Rigetti Computing gained 14.6% and Infleqtion added 26%.
(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by Pooja Desai)
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