US Stock Market Declines Amid Crude Oil Price Surge and Weakness in Technology Stocks

US Stock Futures Indicate Negative Start as Energy Prices Remain Elevated

The US stock futures are signaling a negative start on Wall Street in Tuesday's trade, 28 April, as the lack of clarity over the resumption of US-Iran peace talks continues to keep energy prices elevated. This development has resulted in futures tied to the three key indices - the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite - trading with losses between 0.2% and 1.1%.

The recent gains made by chip stocks have reversed, with a report pointing to weakness in OpenAI. The company's revenue and new users growth were below its own targets, according to a Wall Street Journal report. This news has had a significant impact on the market, with shares of Oracle dropping 7.5%, while Advanced Micro Devices and CoreWeave are down between 2% and 5%.

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On the geopolitical front, the US is reviewing Tehran's latest proposal to resolve the war in the Middle East, but a US official said President Donald Trump is dissatisfied with the proposal as it does not adequately address Iran's nuclear program. Iran reportedly conveyed through Pakistan that hostilities could cease if Washington lifted its naval blockade, agreed to a revised framework for transit through Hormuz, and provided assurances against future military action.

While the Middle East conflict continues to influence the market sentiment, investor focus will also remain on earnings, as four megacap tech names - Alphabet, Meta Platforms, Microsoft, and Amazon - are scheduled to report on Wednesday after the bell. Expectations remain high that the tech majors will confirm another round of heavy infrastructure investment, which typically flows directly into chip demand. Apple will follow on Thursday after the close, rounding out what could be the most consequential earnings window of the quarter.

Beyond earnings, markets are also watching the Federal Reserve meeting and fresh inflation data due later this week. The Bank of Japan kept its key interest rate unchanged at 0.75% on Tuesday, while the Federal Reserve, Bank of England, and European Central Bank are all expected to maintain the status quo but could strike a cautious tone amid rising oil-led inflation risks.

Despite the geopolitical tensions and elevated crude oil prices, US stocks have broken multiple record highs in April, led by renewed optimism around artificial intelligence and resilient corporate earnings, which helped Wall Street recoup all of its war-driven losses. In the bond market, Treasury yields ticked higher following the rise in oil prices, with investors trimming aggressive expectations of policy easing as energy-driven inflation risks continue to build.

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Crude prices have been marching higher, with benchmark US crude jumping $5.42 to $101.79 a barrel, while Brent crude, the international benchmark, gained another $4.3 to over a month high of $112 a barrel. Brent prices were hovering near $70 per barrel before the war and have briefly surged to nearly $120 on a couple of occasions when concerns over prolonged disruptions escalated.

The uncertainty surrounding the two-month-long conflict is intensifying fears that supply disruptions will persist for longer than expected, pushing crude oil prices back toward their recent peaks. Energy stocks are gaining strength, with oil majors like BP also reporting stronger earnings driven by trading gains amid elevated energy prices.