Dow Jones, S&P 500 and Nasdaq 100 futures barely moved early Tuesday as traders weighed progress toward reopening the Strait of Hormuz against unresolved U.S.-Iran tension. Oil jumped on the standoff, and investors are bracing for July inflation data that could shape the Federal Reserve's next move.
Dow Jones Industrial Average futures fell 37 points in overnight trading Tuesday, while S&P 500 futures ticked marginally lower and Nasdaq 100 futures traded near the flatline. The moves follow a session in which the S&P 500 finished Monday little changed as uncertainty over the Middle East conflict continued to hang over markets.
Oil jumps as Hormuz uncertainty persists
Iran has said it is closing in on a deal with Oman to reopen the Strait of Hormuz, but Tehran continues to resist direct negotiations with the U.S. until several conditions are met. Iranian Foreign Minister Abbas Araghchi said Sunday there was no possibility of restarting negotiations as long as the U.S. keeps violating the June memorandum of understanding and does not compensate Iran for those violations, according to the semi-official Tasnim News Agency.
West Texas Intermediate crude futures settled 5.1% higher at $82.13 a barrel Monday. International benchmark Brent crude climbed 5% to $87.72 as the standoff persisted.
Inflation data looms over a wavering Fed
Investors will next turn to a key batch of inflation data this week. The July consumer price report is due Wednesday. The producer price index follows Thursday.
Higher oil prices are renewing concerns about price pressures just as the slowdown in hiring raises questions about the strength of consumer spending. Fed funds futures traders now see roughly a 50% chance of a September rate hike, down from 67% a week earlier, according to CME Group's FedWatch tool.
According to Brent Schutte, CIO at Northwestern Mutual Wealth Management Company: "likely gives policymakers some breathing room to keep interest rates steady"
Source: CNBC
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