Summary - U.S. stock futures slipped on Thursday as the conflict centered on Iran persisted, pushing oil prices higher and keeping markets on edge. A Senate vote blocked a resolution that would have constrained President Donald Trump’s ability to carry out strikes without congressional authorization. Technology and energy markets reacted in different directions: Broadcom rallied after strong quarterly results and forward guidance, while crude benchmarks extended gains amid concerns over shipping through the Strait of Hormuz. China opened its annual policy meetings with a downshifted growth target and stable fiscal planning.
1. Futures drift lower
U.S. equity futures were lower early Thursday as investors weighed the fallout from fighting in and around Iran that showed little sign of abating. At 03:10 ET (08:10 GMT), the Dow futures contract was down 285 points, or 0.6%. S&P 500 futures had declined by 29 points, or 0.4%, while Nasdaq 100 futures were off 115 points, or 0.5%.
The previous session on Wall Street closed on an upbeat note, as energy and bond moves moderated and the main indexes managed gains. By the end of trading on Wednesday, the Dow Jones Industrial Average had advanced 0.5%, the S&P 500 had climbed 0.8%, and the Nasdaq Composite had added 291 points, or 1.3%.
Market sentiment received some support from an activity reading in the U.S. services sector that analysts at Capital Economics said suggested a potential "reacceleration" in the underlying economy. Overseas, Asian equities showed tentative signs of stabilizing after sharp earlier weakness, with South Korea’s Kospi rebounding following an intraday drop severe enough to trigger a temporary halt in trading. European stocks, however, moved fractionally lower as investors there remain sensitive to energy-price swings given the region’s reliance on shipments passing through the Strait of Hormuz.
2. Oil continues rally
Crude futures climbed further, extending a run of gains as the conflict intensified concerns about supply interruptions from a region that supplies a significant share of the world’s oil and liquefied natural gas.
Brent futures rose 2.9% to $83.75 a barrel, while U.S. West Texas Intermediate crude increased 3.2% to $77.08 a barrel. Both contracts marked a fifth consecutive session of gains, with Brent hitting its highest level since July 2024.
Iran has targeted tankers in the Strait of Hormuz, a maritime chokepoint through which about a fifth of the world’s oil and liquefied natural gas moves, effectively disrupting traffic through the corridor. Prices eased somewhat after President Donald Trump suggested the U.S. could escort and insure vessels attempting to transit the strait, though overall momentum remained upward.
Rising crude has immediate knock-on effects at the pump. American consumers are already seeing record increases in gasoline prices, a trend analysts warn could gain further political importance if it persists into the campaign season ahead of U.S. midterm elections later this year, when affordability has become an increasingly prominent issue.
3. Senate rejects measure to limit strikes
Political developments in Washington echoed the violence on the ground. Republican senators blocked a measure that would have required President Trump to halt offensive operations against Iran or parts of its government or military without an explicit declaration of war or congressional authorization.
The Senate voted 53-47 against the resolution. Democrats had sought to use the proposal to enhance the legislature’s role in determining the scope and continuation of military actions that White House officials have signaled could continue for an indefinite period.
The vote coincided with fresh hostilities in the region. Iran launched another round of missiles at Israel on Thursday, and Israel continued to conduct air strikes against Iranian targets in coordination with Washington.
4. Broadcom posts strong quarter, stock jumps
Chipmaker Broadcom saw its shares rally sharply in extended trading after reporting quarterly results that beat expectations on both the top and bottom lines and giving revenue guidance for the current quarter that exceeded consensus forecasts. The company also announced a share buyback authorization of up to $10 billion.
In the fiscal first quarter, Broadcom reported adjusted earnings of $2.05 per share on revenue of $19.31 billion, compared with analyst estimates of $2.02 per share on revenue of $19.21 billion. The company also signaled second-quarter revenue of approximately $22 billion, versus a consensus estimate of $20.4 billion, and projected AI semiconductor revenue of $10.7 billion.
Broadcom shares initially whipsawed after the report but ultimately rose about 6% in after-hours trade. During the regular session on Wednesday the stock had moved higher by 1.2%.
5. China sets a subdued growth target
China opened its "Two Sessions" meetings by announcing a more muted gross domestic product goal for 2026, while emphasizing continued fiscal support. Authorities set an annual GDP growth target of 4.5% to 5%, down from a flat 5% target that had been used over the previous five years. This marks the softest official growth target since 1991.
Beijing left its fiscal deficit-to-GDP target at around 4% and maintained largely steady goals for fiscal spending this year. OCBC analysts described the new forecasts as a "more pragmatic approach" for 2026, indicating that policymakers have adjusted expectations to align with a more cautious near-term outlook for the world’s second-largest economy.
Implications and market players to watch
Energy markets and the sectors tied to commodity prices and transportation remain most directly affected by the escalation around Iran and the resulting pressure on shipping through the Strait of Hormuz. Financial conditions could be influenced by further oil-price increases, which in turn may affect consumer spending and inflation readings. Technology and semiconductor markets saw a notable reaction to corporate results, with Broadcom’s strong outlook lifting sentiment in parts of the tech sector.
Geopolitical developments in Washington could shape market perceptions of the conflict’s duration and the potential for widening involvement, while China’s adjusted growth expectation may influence global demand projections and commodity outlooks.