By Ragini Mathur
July 8 (Reuters) – U.S. stock index futures slid on Wednesday, with Nasdaq futures touching a four-week low, after President Donald Trump said the interim deal aimed at ending the war with Iran was “over,” sending oil prices surging and investors scrambling for safety.
Speaking in Ankara ahead of a NATO summit in the Turkish capital, Trump said he had no interest in engaging further with Iran, deepening investor concerns over renewed escalation in the Middle East and marking the latest blow to the fragile ceasefire between Washington and Tehran.
Oil prices extended gains on Wednesday following Trump’s remarks, with Brent crude futures and U.S. West Texas Intermediate crude futures both rising more than 6%.
“It’s a big wake-up call for the markets because the expectation was that following the MOU, we were likely to start to see the flow of oil coming back into the markets. And we saw inflation expectations being dialed down,” said Aneeka Gupta, director of macroeconomic research at WisdomTree.
“The way we’re looking at it now is what has changed materially is the (Iranian) oil waiver is gone. It has removed a very key incentive for Iranian compliance.”
The jump in crude prices lifted energy stocks in premarket trading. Chevron rose 2.8%, Exxon Mobil gained 2.6% and ConocoPhillips advanced 2.9%.
Devon Energy climbed 2.5%, while Occidental Petroleum, APA Corp and Diamondback Energy were up 2.5%, 3% and 3.8%, respectively.
Travel stocks fell as higher oil prices stoked concerns over fuel costs and demand.
United Airlines dropped 4.2%, Southwest Airlines lost 3.3% and Delta Air Lines fell 3.2%.
Cruise operators also slipped, with Carnival down 3.1%, Royal Caribbean 3.2% and Norwegian Cruise Line 2.5%.
At 06:09 a.m. ET, Dow E-minis were down 712 points, or 1.34%, and S&P 500 E-minis were down 80 points, or 1.06%. Nasdaq 100 E-minis were down 450 points, or 1.55%.
Small-cap Russell 2000 index futures fell 1.5% to a three-week low. The CBOE Volatility Index, Wall Street’s fear gauge, hit an over one-week high, climbing 2.5 points to 18.63.
The latest escalation puts pressure on the U.S. equity rally that is already showing signs of fatigue, as higher oil prices threaten to revive inflation concerns and complicate the Federal Reserve’s path.
The Fed’s June policy meeting minutes are due later in the session. They could provide clues on how policymakers are assessing inflation risks and economic growth.
According to CME’s FedWatch tool, markets are currently pricing in at least one rate hike by the end of 2026.
Technology stocks were also under pressure after a volatile stretch for the sector in recent weeks.
Broadcom pared some declines and was last down 0.7% after Apple said it plans to spend more than $30 billion as part of a chip-supply agreement reached earlier this week with the chipmaker.
Chip stocks were broadly lower, with the iShares Semiconductor ETF down 3%.
(Reporting by Ragini Mathur in Bengaluru; Editing by Pooja Desai and Shinjini Ganguli)
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