S&P 500 futures slipped 0.2% and Dow futures fell about 110 points on Sunday after Iran added new demands before it will fully reopen the Strait of Hormuz. The pullback follows the S&P 500's best week in four months, with a July inflation reading due Wednesday.
S&P 500 futures slipped 0.2% on Sunday after Iran raised fresh demands that clouded prospects for reopening the Strait of Hormuz. Dow Jones Industrial Average futures fell about 110 points, or 0.2%, while Nasdaq-100 futures were down fractionally.
Iran Adds Demands Over the Strait of Hormuz
Iran had indicated it was close to a deal with Oman over managing shipping traffic through the Strait of Hormuz, which has been largely shut since the start of the war in late February, constricting the world's oil supply. But on Saturday, Iran demanded billions of dollars in compensation from the U.S., the withdrawal of U.S. troops from the region and an end to the U.S. naval blockade on Iranian ports before the waterway can be fully reopened, according to the Associated Press. There was no immediate comment from the White House.
President Trump indicated he would let economic pressure weigh on Iran rather than order major U.S. strikes, telling Axios on Sunday: "We are low keying it."
Wall Street Comes Off a Record Week
The dip follows the S&P 500's best week in four months. The index closed at a record high on Friday after a weaker-than-expected jobs report eased fears of an imminent interest-rate hike. For the week, the S&P 500 gained 3.6%, the Dow rose 3% and the Nasdaq jumped 5.2%.
Inflation Data Looms Over the Week Ahead
Investors are now turning to July's inflation data, with the consumer-price index due Wednesday and the producer-price index due Thursday. The CPI reading is expected to reflect higher oil prices in late July, when the Iran ceasefire deal fell apart. Inflation has stayed well above the Federal Reserve's 2% target for years.
Earnings still command attention: Lumentum and Super Micro Computer report Tuesday, followed by Cisco on Wednesday and Applied Materials on Thursday. Crude oil futures rose about 0.6% to near $79 a barrel on Sunday after tumbling more than 11% the prior week on hopes for a new Iran ceasefire.
Sources: MarketWatch, Investor's Business Daily
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