U.S. Stock Futures Drop After Israel Strikes Iran Amid Tariff Concerns

New York City, NY — U.S. stock futures fell sharply on Thursday night following Israel‘s military airstrike on Iran. Futures linked to the Dow Jones Industrial Average decreased by 611 points, falling nearly 1.4%. The S&P 500 lost approximately 1.6%, while Nasdaq futures also dropped 1.6%.

Israel’s Defense Minister, Israel Katz, declared a special state of emergency after the attack. Two U.S. officials confirmed that there would be no American involvement or assistance in this conflict. In response to the unfolding situation, Brent crude prices surged over 7%, reflecting growing market tensions.

Markets had been optimistic earlier in the week, buoyed by positive economic indicators such as a 0.1% rise in the producer price index for May. This number was below the 0.2% increase anticipated by economists, leading to easier bond yields and improved investor sentiment. The S&P 500 had approached its all-time high, being less than 2% away.

Despite the earlier positive trends, apprehensions from investors regarding potential tariff policies from the White House led to market hesitance. Treasury Secretary Scott Bessent mentioned that the Trump administration might extend the current 90-day tariff pause beyond the July 9 deadline, contingent on nations showing “good faith” in trade negotiations. President Trump raised concerns about imposing unilateral tariffs, especially regarding discussions with Japan and South Korea.

As trading progressed, the major stock indices showed resilience, with the S&P 500 up nearly 0.8% and the Nasdaq Composite poised for a 0.7% gain, making it a third consecutive week of positive returns.

Investors are now awaiting the preliminary June reading from the University of Michigan’s consumer sentiment report, which is anticipated to shed light on economic conditions.