Futures and market tone
U.S. equity futures were largely directionless in early trading as investors parsed fresh developments on several fronts: a diplomatic standoff between the U.S. and Iran, stronger oil prices and the start of an intense week of corporate reports. By 03:28 ET (07:28 GMT), Dow futures were essentially flat, S&P 500 futures had fallen 14 points, or about 0.2%, and Nasdaq 100 futures were lower by roughly 117 points, or 0.4%.
The prior session left the benchmark S&P 500 and the tech-heavy Nasdaq Composite slightly higher, while the Dow Jones Industrial Average finished lower. Market participants are approaching the busiest stretch of the quarterly earnings calendar, with approximately 35% of S&P 500 companies scheduled to release results and guidance in the coming days.
Early corporate movers already illustrate the mixed backdrop. Telecommunications firm Verizon raised its full-year profit outlook, which the market rewarded with higher shares. By contrast, Domino’s Pizza trimmed its expected growth for the year, citing weaker consumer sentiment and intense competition; its stock plunged about 8.8% on the update. Major names slated to report include Visa, Coca-Cola and T-Mobile US.
Attention is especially focused on large technology companies that will report this week. Investors are seeking clarity on the scale and pace of their AI-related capital expenditures - investments that, according to market commentators, have helped equities absorb shocks from geopolitical tensions and surging energy costs.
Diplomatic developments - Trump and Iran
Media accounts indicated President Trump is displeased with an Iranian proposal that would bring the two-month conflict to an end and reopen the Strait of Hormuz, but delay talks over Tehran’s nuclear program until a later date. Reuters cited a U.S. official briefed on the matter in reporting that the president has frequently characterized the removal of Iran’s nuclear capability, and its potential access to a weapon, as a principal objective of the joint U.S.-Israeli campaign launched in late February - a position that helps explain his reported dissatisfaction with the proposal.
Momentum toward renewed talks appeared to stall over the weekend when Trump called off plans to send negotiators to Pakistan for another round of discussions. Iran’s foreign minister did make two short visits to Pakistan’s capital over the weekend and subsequently met with Russian President Vladimir Putin, who expressed support, according to reports.
The Strait of Hormuz, a narrow but crucial maritime passage through which roughly a fifth of global oil shipments transit, has remained effectively closed to commercial shipping for weeks. That disruption has helped drive oil prices well above pre-conflict levels, and traders continued to bid futures higher amid concerns that a prolonged supply shock could push global inflation higher and prompt central banks to tighten policy further.
OpenAI and internal performance targets
The Wall Street Journal reported that OpenAI has fallen short of several internal metrics, including a target to achieve one billion weekly active users for its ChatGPT product by the end of 2025. The report also said the company missed multiple monthly revenue targets earlier in the year.
According to the report, Chief Financial Officer Sarah Friar warned other executives about the risk that revenue might not expand quickly enough to meet the firm’s commitments for future data center contracts. Board members have examined recent data center agreements and questioned CEO Sam Altman’s push for additional computing capacity in the face of weakening revenue metrics.
Those concerns come as OpenAI is reportedly moving toward an initial public offering expected by the end of the year. The firm’s finance leadership and other executives are said to be increasing cost controls and emphasizing stronger business discipline in response to the reported shortfalls.
BP posts sharply higher quarterly profit
In London trading, shares of BP rose after the British energy major reported that first-quarter underlying replacement cost profit more than doubled versus the year-ago period. The company recorded $3.2 billion in that metric, compared with $1.38 billion a year earlier.
BP is among a group of European oil companies that have benefited from a war-related tightening in crude supplies, which has bolstered revenues across the sector. Investors reacted positively to BP’s results amid the broader rally in oil and gas prices.
Bank of Japan keeps policy steady but signals caution
The Bank of Japan left its short-term policy rate unchanged at 0.75% - a decision that was widely expected - but its policy statement raised cautionary notes about the outlook. The central bank highlighted a moderation in economic growth together with rising inflationary pressures tied to the conflict in the Middle East.
The vote was not unanimous: three of the nine members of the BOJ’s rate-setting board favored a higher setting because of mounting inflation risks. That level of dissent was the largest since January 2016, when the bank adopted negative interest rates.
In its commentary, the BOJ observed that underlying inflation has been approaching 2% and that real interest rates remain at significantly low levels, and said it will continue to raise its policy rate in response to developments in the economy, prices and financial conditions.
Analysts at Capital Economics noted the hawkish tone in the BOJ’s outlook report and reaffirmed their expectation that the bank will hike rates in June.
What investors face this week
Between diplomatic uncertainty, a heavy slate of corporate earnings and questions about the durability of tech-sector revenue growth, markets face multiple crosswinds. Energy producers and financial institutions are particularly exposed to shifts in oil prices and central bank reactions to inflation. Technology stocks remain sensitive to signs about the sustainability of AI-related spending and the revenue trajectories of leading software and services firms.
For traders, the confluence of these developments means that headline moves may come quickly as company reports and diplomatic signals hit the tape. With a substantial portion of the S&P 500 due to publish, guidance and capital-allocation plans announced this week could shape sentiment for the remainder of the quarter.
Bottom line
Early trading showed limited directional conviction as markets balanced the immediate outlook for diplomacy in the Gulf, pressure on energy markets from a near-closure of the Strait of Hormuz, corporate profit updates and fresh scrutiny of a major AI company's internal performance. The combination of those themes leaves investors focused on upcoming earnings and central bank language for further cues on growth, inflation and policy.