US Stock Market Declines as S&P 500 and Nasdaq Futures Fall Up to 0.7%

US Stock Futures Trade with Mild Losses Amid Ongoing Middle East Tensions

US stock futures experienced mild losses on Tuesday, May 19, as traders continued to monitor the latest developments in the Middle East. The technology stocks that had driven Wall Street to record highs showed signs of cooling, with the Nasdaq 100 futures slipping 0.7% and the S&P 500 futures falling 0.4%. This puts the benchmark index on track for its longest losing streak since March. Futures tied to the Dow Jones Industrial Average were down marginally by 0.02%.

The previous session saw both the Nasdaq and the S&P 500 close in the red, although they recovered most of their intraday losses amid hopes of easing tensions in West Asia. The Iran conflict has now stretched beyond 80 days, with no clear pathway to a resolution. The Strait of Hormuz remains largely disrupted, with the two-day summit between US President Donald Trump and Chinese President Xi Jinping ending last week without any concrete progress toward reopening the strategic shipping route.

Despite the prolonged standoff in the Middle East, US stocks had climbed to multiple record highs in recent months, largely driven by the artificial intelligence-led rally. However, the momentum has recently cooled amid rising bond yields and elevated crude oil prices. Higher bond yields tend to weigh on technology stocks, as their valuations are heavily dependent on expectations of strong future earnings growth.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Comparison of US Stock Indexes

The rally in tech stocks came to a halt on Friday after a sharp sell-off in global bond markets triggered concerns that major central banks may adopt tighter monetary policies as the Middle East conflict continues to push oil prices higher and fuel inflation fears. "Markets are no longer moving on AI excitement alone. Rising oil prices, higher bond yields, and doubts about how quickly companies can monetise AI are finally starting to matter. And after months of nearly nonstop gains, investors are beginning to ask whether this rally needs a breather," said Vested Finance.

Looking ahead, market direction is likely to be shaped by the release of the minutes from the Federal Reserve's latest policy meeting, due on Wednesday. Crude oil prices have also cooled after a steady rally, with West Texas Intermediate (WTI) crude futures slipping $2 to $102 per barrel, while Brent crude futures fell 1% to $111 per barrel.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Crude Oil Prices

The US has issued a temporary waiver permitting sales of Russian crude already loaded onto tankers, offering limited near-term supply relief. However, unresolved disruptions in the Strait of Hormuz and persistent geopolitical tensions are likely to keep oil prices volatile and fundamentally supported in the near term.

US stocks in focus include NVIDIA, which slipped to $219 ahead of its earnings release on Wednesday, while Walmart traded with mild losses. Among other premarket movers, cloud services firm Akamai Technologies fell 3.8% after announcing a $2.6 billion convertible bond offering. Shares of Micron Technology were also down 2% before the opening bell. Meanwhile, The Home Depot shares edged higher after the company reported its first-quarter results. Blackstone and Alphabet shares advanced after the former announced plans to invest $5 billion in equity capital into a new artificial intelligence infrastructure company in partnership with Google.