Stock Index Futures Tumble as Oil Jumps After Trump Says U.S.-Iran Ceasefire Is Over, FOMC Minutes on Tap

September S&P 500 E-Mini futures (ESU26) are down -0.96%, and September Nasdaq 100 E-Mini futures (NQU26) are down -1.34% this morning as sentiment took a hit after U.S. President Donald Trump declared an end to the ceasefire with Iran, sending oil prices and bond yields soaring.

When asked at the North Atlantic Treaty Organization summit in Ankara, Turkey, whether the ceasefire and memorandum of understanding were over, Trump said: “It’s a very interesting question. For me, I think it’s over. As far as I’m concerned, it’s just a waste of time.” The price of WTI crude jumped over +5% following Trump’s comments. Treasuries fell across the curve as a spike in oil prices reignited inflation concerns, with the benchmark 10-year yield rising two basis points to 4.58%.

Trump’s remarks sharply accelerated an earlier drop in stock index futures triggered by a fresh flare-up in tensions between Washington and Tehran. The U.S. on Tuesday struck more than 80 targets in Iran and revoked a waiver permitting the sale of Iranian oil in response to Tehran’s attacks on ships near the Strait of Hormuz.

Investors are now awaiting the release of the Federal Reserve’s June meeting minutes.

In yesterday’s trading session, Wall Street’s main stock indexes closed lower. Chip and AI infrastructure stocks sank after a blowout forecast from Samsung Electronics failed to impress investors, with Intel (INTC) plunging over -9% to lead losers in the S&P 500 and Sandisk (SNDK) slumping more than -7%. Also, airlines and other travel stocks slid as oil prices rose, with United Airlines Holdings (UAL) and Carnival (CCL) falling over -3%. In addition, Rivian Automotive (RIVN) tumbled over -18% after the EV maker announced plans to sell 75 million shares to help repay a $4.5 billion loan from the Energy Department. On the bullish side, Cboe Global Markets (CBOE) climbed more than +5% and was among the top percentage gainers on the S&P 500 after the exchange operator posted record June and second-quarter trading volumes across its options venues.

“While we remain confident in AI’s growth story and continue to see attractive opportunities in semis and hardware, we have also highlighted that the next leg of equity gains is likely to be marked by a broadening of market leadership. Investors should ensure diversified exposure,” said Ulrike Hoffmann-Burchardi at UBS Chief Investment Office. 

Economic data released on Tuesday was negative for equities. The U.S. trade deficit widened to -$77.6 billion in May, its largest since March 2025, as the country imported more products such as pharmaceuticals, vehicles, and semiconductors.

New York Fed President John Williams said on Tuesday that he expects lower energy prices to drive a decline in overall inflation over the coming months. “I do feel a little bit more positive about the near-term inflation outlook because of the energy price declines that we’re going to see,” Williams said. The New York Fed chief added that monetary policy is well-positioned to achieve the Fed’s mandate.

Meanwhile, U.S. rate futures have priced in a 64.2% chance of no rate change and a 35.8% chance of a 25 basis point rate hike at the July FOMC meeting.

Today, market watchers will pay close attention to the publication of the minutes of the Fed’s first policy meeting under Kevin Warsh as chairman. Investors want to see whether Mr. Warsh’s pledge to overhaul Fed communications extends to the minutes, after the central bank issued a much shorter policy statement following its rate decision in mid-June. Fed officials left interest rates unchanged last month but released projections showing growing concern that they may need to raise interest rates to counter rising price pressures. However, Warsh said last week that inflation risks had come down in recent weeks. Against that backdrop, investors will be looking for further clues on whether the Fed could raise interest rates in the coming months.

On the economic data front, investors will focus on the Fed’s Consumer Credit report. Economists project U.S. Consumer Credit to be $16.9 billion in May, compared to the previous month’s figure of $20.7 billion.

U.S. Wholesale Inventories data will also be released today. Economists anticipate that the final May figure will remain unrevised at +0.3% m/m.

The EIA’s weekly crude oil inventories report will be released today as well. Economists expect this figure to be -1.9 million barrels, compared to last week’s value of -3.8 million barrels.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.58%, up +0.50%.

The Euro Stoxx 50 Index is down -2.12% this morning as oil prices surged after U.S. President Trump said he believed the ceasefire with Iran was over. Trump’s remarks came shortly after the U.S. launched a fresh wave of strikes against Iran and revoked a waiver that had allowed the sale of Iranian oil following Tehran’s recent attacks on ships near the Strait of Hormuz. Bank and energy-intensive stocks cratered on Wednesday. Eurozone government bond yields surged, hitting four-week highs, as a jump in oil prices rekindled inflation concerns, with traders now pricing in 38 basis points of European Central Bank rate hikes this year. Meanwhile, Spain’s IBEX 35 led losses among regional bourses after President Trump said he had ordered Treasury Secretary Scott Bessent to cut off all trade with Spain. “We don’t want to do any trade business with Spain anymore,” Mr. Trump said at a press conference in Ankara, Turkey. In corporate news, Bahnhof surged over +16% after Telenor agreed to acquire a controlling stake in the Swedish broadband provider in a deal valuing it at 6.1 billion Swedish crowns ($629.7 million).

The European economic data slate is mainly empty on Wednesday.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.49%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -2.11%.

China’s Shanghai Composite Index closed lower and hit a 1-month low today as an escalation in tensions between the U.S. and Iran weighed on sentiment. New energy vehicles, rare earth, and defense stocks led the declines on Wednesday. Limiting losses, semiconductor and other AI-related stocks advanced as investors rotated into companies tied to the AI boom that offered more attractive valuations. Adding to the momentum, Reuters reported that DeepSeek is developing its own chip to help power AI systems, while The Information reported that Zhipu is considering designing its own AI chip. “It’s a clear catalyst as DeepSeek will have to work with local chip makers for such a task, given the geopolitical consideration,” said Steven Tseng at Bloomberg Intelligence. In corporate news, Alibaba Group Holding jumped over +12% in Hong Kong as investors grew increasingly optimistic about its earnings. Investor focus is now squarely on China’s key inflation gauges for June, scheduled for release on Thursday. Economists expect China’s consumer inflation to ease slightly due to lower pork prices, reflecting weak consumer demand, while producer prices are projected to pick up, supported by a favorable base effect.

Japan’s Nikkei 225 Stock Index closed sharply lower today as investors continued to trim their exposure to crowded technology stocks. Also dampening sentiment, oil prices climbed in Tokyo trading as renewed tensions in the Middle East rekindled concerns over energy supplies. Chip and other AI-related stocks slumped on Wednesday, tracking overnight losses in their U.S. peers. Also hurting chipmakers was news that China’s DeepSeek is developing its own chip to help power AI systems, while Zhipu is weighing designing its own AI chip amid growing demand and U.S. export controls. Data released on Wednesday showed that Japan’s services sector sentiment index improved slightly in June, though it remained well below the 50 mark that separates optimism from pessimism. Separately, data showed that Japan recorded a current account surplus of 3.97 trillion yen in May. Meanwhile, Japanese government bond yields climbed to 30-year highs on Wednesday as investors grew concerned that rising inflation and expansive spending plans could strain public finances. The rise also followed reports that the government was considering revising the language on monetary policy in its economic blueprint. Rakuten Securities Economic Research Institute economist Nobuyasu Atago said that it is only a matter of time before the 10-year JGB yield rises above 3%, driven by inflation, the BOJ’s rate-hiking stance, and fiscal concerns. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +46.97% to 43.65.

The Japanese May Current Account n.s.a. stood at 3.968 trillion yen, weaker than expectations of 4.121 trillion yen.

The Japanese June Economy Watchers Current Index came in at 44.0, weaker than expectations of 44.3.

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks fell in pre-market trading amid risk-off sentiment, with Meta Platforms (META) and Nvidia (NVDA) dropping over -1%.

Chip and AI infrastructure stocks slid in pre-market trading. Sandisk (SNDK) was down over -4%, Micron Technology (MU) was down nearly -4%, and Marvell Technology (MRVL) was down over -3%.

Airlines and other travel stocks dropped in pre-market trading amid a spike in oil prices, with Carnival (CCL) and American Airlines Group (AAL) falling more than -3%.

Travelers (TRV) slipped over -1% in pre-market trading after Keefe Bruyette downgraded the stock to Market Perform from Outperform.

Energy stocks advanced in pre-market trading as oil prices jumped, with Occidental Petroleum (OXY) rising nearly +3% and Chevron (CVX) gaining over +2%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - July 8th

Levi Strauss & Co. (LEVI), PriceSmart (PSMT), AZZ Inc. (AZZ), Nurix Therapeutics (NRIX).