US stock futures steady as investors weigh Middle East war fallout

2026-03-05 - 12:04

Dow E-minis fell 76 points, S&P 500 E-minis fell 0.5 points, and Nasdaq 100 E-minis rose 0.75 points. (AFP pic) NEW YORK: US stock index futures were steady today as the Middle East conflict entered its sixth day, stoking fears of inflationary pressures that could complicate the Federal Reserve’s (Fed) monetary policy decisions. Buoying sentiment were strong forecasts from Broadcom that projected its artificial intelligence (AI) chip revenue would exceed US$100 billion next year, sending shares of the chip designer up 7.6% in premarket trading. Despite the US-Israeli air war against Iran showing no signs of cooling off, Wall Street’s main indexes have fared better than their European and Asian counterparts this week, aided primarily by a rebound in technology stocks that bore the brunt of February’s selloff. Still, a prolonged disruption in shipping through the strategic Strait of Hormuz is likely to further fuel inflation pressures through energy and shipping costs, at a time when US tariffs have already complicated the Fed’s monetary policy outlook. Any signs that crude prices could hit US$100 a barrel would be worrisome for markets and investors were on the lookout for any reports that the conflict could be nearing its end. Policymakers have broadly acknowledged the need to wait and gauge the impact on the economy, although investors are anticipating price pressures to delay a 25-basis-point interest rate cut by the Fed to September from July, according to LSEG-compiled data. “The Fed’s policy outlook is becoming more complicated. A prolonged energy shock would reduce flexibility for rate cuts, particularly if headline inflation reaccelerates. “That risk is now being priced into markets in real time,” said Daniela Hathorn, senior market analyst at Capital.com. At 5.36am, Dow E-minis were down 76 points, or 0.16%, S&P 500 E-minis were down 0.5 points, or 0.01%. Nasdaq 100 E-minis were up 0.75 points, or flat. The CBOE volatility index was marginally higher, reflecting broader investor nervousness, while futures tied to the rate-sensitive Russell 2000 index were down 0.2%. Travel stocks that are the most sensitive to energy prices were mixed. American Airlines slipped 0.9%, while Carnival edged up 0.7%. Prices of safe-haven precious metals edged higher, aiding a 1.2% gain each in miners Harmony Gold and Alamos Gold. A prolonged conflict could also disrupt supplies of key semiconductor manufacturing materials and impede data center deployment by AI leaders in the Middle East. Chip stocks were also mixed, with Nvidia flat and Advanced Micro Devices down 0.7%. Energy companies such as Cheniere Energy and Valero Energy were marginally higher, while defense stocks such as RTX and Aerovironment added 0.8% each. Fresh Fed remarks from US Fed vice chair Michelle Bowman are due later in the day, alongside the weekly jobless claims report. The spotlight will shift to the non-farm payrolls report on Friday.