U.S. equity futures moved higher early Thursday as markets absorbed another round of reciprocal strikes between American and Iranian forces in and around the Persian Gulf. The latest military exchanges have undercut optimism around a fragile ceasefire and kept energy markets on edge, even as front-month crude eased slightly from recent peaks.
By 02:53 ET (06:53 GMT), futures tied to the major U.S. benchmarks were trading up: the Dow futures contract had advanced by 82 points, or 0.2%, S&P 500 futures were up 21 points, or about 0.3%, and Nasdaq 100 futures gained roughly 149 points, or 0.5%.
The cash markets had finished mixed the prior session. The blue-chip Dow Jones Industrial Average fell 1.1%, the S&P 500 declined by 21 points, or 0.3%, while the Nasdaq Composite inched higher by 0.2%. An abrupt comment from U.S. President Donald Trump that he believed a framework ceasefire with Iran was "over" weighed on sentiment and coincided with a resurgence in oil prices, reviving concerns about fuel-driven inflationary pressure.
Still, heavyweights in the technology sector helped limit the market damage. Nvidia shares rose after a report suggested China would soon permit some domestic purchases of the company's H200 artificial intelligence chip, a development that bolstered risk appetite in tech names.
Traders also parsed the minutes from the Federal Reserve's June policy meeting. Analysts at Vital Knowledge described the record as carrying a "fairly dovish tone on the monetary policy outlook," even as participants continue to flag concerns about price growth tied to energy markets.
U.S.-Iran military actions
The U.S. Central Command said a fresh wave of strikes hit roughly 90 targets in Iran, including air defense sites and locations used to store missiles and drones. The U.S. military framed the operation as intended to reduce Iran's ability to threaten commercial shipping in the Strait of Hormuz.
Iran's military answered with separate strikes it described as aimed at U.S. military bases in Kuwait and Bahrain. The Islamic Revolutionary Guards Corps also warned of additional attacks on American military sites in the Gulf should Washington conduct further strikes.
When combined with earlier attacks this week, these actions have called into question the status of the interim ceasefire agreed in June and have left negotiations toward a lasting settlement stalled. The discussions have been mired in disputes over control of the Strait of Hormuz, Iran's nuclear program, and clashes involving Israel and Iran-backed Hezbollah militants in Lebanon.
Returning from a NATO summit, President Trump said Iran had contacted U.S. officials and that Tehran wanted to "make a deal so badly," though, according to available information, Iran has not publicly indicated it is engaging in new talks.
Oil market reaction
Brent crude, the global benchmark, was trading just under $78 a barrel amid the renewed strain. That level sits above the roughly $71-a-barrel price observed before the latest attacks. By 03:42 ET, Brent was reported down 1.0% at $77.26 a barrel.
Markets have been sensitive to the potential for shipping disruptions through the Strait of Hormuz - a critical corridor that handles about a fifth of the world's oil and liquefied natural gas shipments. Tanker traffic had shown early signs of recovery after the interim ceasefire was signed on June 17, which had helped pull prices closer to where they traded before the outbreak of the Iran conflict in late February.
Still, crude staged a marked rise shortly after the war began, briefly topping $110 a barrel. That spike and subsequent volatility have been central to concerns among market participants and policymakers about broader inflationary consequences, and whether central banks might need to respond with higher interest rates to counter energy-led price increases.
The expectation that hostilities might be winding down and that supply-chain snarls were easing supported hopes for cooling inflation. The latest exchange of attacks, however, has again clouded the outlook for energy costs and the inflation trajectory.
Corporate and earnings focus - PepsiCo
On the corporate calendar, PepsiCo was scheduled to release its quarterly results before the opening bell. The food and beverage company had reaffirmed its annual targets in April for the second time this year.
CFO Steve Schmitt told investors then that the "macroeconomic environment has become more volatile and uncertain because of ongoing geopolitical conflicts." Concerns persist about how rising energy and raw-material costs tied to the Iran conflict could affect global consumer goods companies already navigating broad U.S. tariffs.
Schmitt did not rule out the use of price increases to offset higher input costs, but emphasized such measures would be a last resort. As of the data available, PepsiCo shares had gained roughly 0.2% so far this year.
China inflation data
Official figures from China showed mixed price signals in June. Consumer inflation eased, while factory-gate inflation accelerated to a near four-year high.
The consumer price index rose 1.0% year-on-year in June, below economists' expectations of a 1.1% increase and down from May's 1.2% gain. On a monthly basis, consumer prices fell 0.3% in June, compared with a forecast decline of 0.2% and following a 0.1% drop in May.
By contrast, the producer price index climbed 4.1% year-on-year in June, matching economists' forecasts and accelerating from May's 3.9% increase. That reading marked the highest annual rise in factory-gate prices since July 2022.
While output prices were weaker in most industries, they were partially offset by significant price increases in electronics. Analysts suggested those gains reflected memory chip shortages driven by heightened AI-related demand.
What this means for markets
The combination of renewed Gulf tensions and elevated oil prices has reintroduced uncertainty into inflation expectations and central bank policy deliberations. Equity markets showed tentative resilience, supported by strength in technology names, while energy and shipping-related sectors remain on watch for further disruption.
At the same time, corporate earnings from major consumer goods firms such as PepsiCo will be examined for signs of margin pressure and management willingness to pass higher costs onto consumers. Separately, disparate price dynamics in China - with softer consumer inflation but firmer producer inflation - add another layer of complexity for global price-setting and supply-chain cost assumptions.
Summary
Futures pointed modestly higher after fresh U.S.-Iran strikes that have raised questions about the endurance of a recent ceasefire and kept oil prices elevated versus pre-attack levels. The military actions included U.S. strikes on roughly 90 targets in Iran and Iranian responses on bases in Kuwait and Bahrain, with warnings of further action from the IRGC. Brent traded near $77.26 a barrel after easing from recent highs, while investors prepared for PepsiCo's earnings report and digested Fed minutes and Chinese inflation readings that together underscore a patchwork of inflation pressures.