US Stock Market Declines, S&P 500 and Nasdaq Futures Drop Up to 0.7% Amid Oil Price Surge

US Equity Index Futures Fall Amid Oil Price Surge and Iran Conflict Tensions

US equity index futures declined on Thursday, 23 April, following a day of record highs for the S&P 500 and Nasdaq Composite on Wednesday. The negative sentiment was fueled by crude oil prices reclaiming the triple-digit mark, as hopes of Iran participating in a second round of peace talks gradually faded.

Futures tied to the S&P 500 fell approximately 0.5%, while Dow Jones Industrial Average futures dropped 354 points, or 0.7%. The technology sector, which has been performing well in recent sessions, showed signs of a negative start, with Nasdaq Composite futures down 0.5%.

The S&P 500 and the tech-heavy Nasdaq finished at record levels on Wednesday following Donald Trump's unilateral ceasefire extension in the Iran conflict. However, oil prices resumed their upward climb after Iran challenged the fragile truce by seizing two cargo ships in the Strait of Hormuz.

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The focus now shifts to whether talks can resume and whether the two sides can reach an agreement, particularly as the closure of the key waterway keeps energy prices elevated, risking higher inflation and weighing on economic growth. Iranian officials have reportedly stressed that no decision has been made yet on whether to take part in a second round of negotiations in Islamabad, citing alleged US violations of the ceasefire, including the naval blockade.

Meanwhile, tensions in the Middle East are prompting the US central bank to delay rate cuts. The Federal Reserve is expected to wait at least six months before cutting interest rates this year, according to a Reuters poll of economists, as war-driven energy shocks reignite already elevated inflation.

US stocks have staged a strong comeback recently, recovering all of their war-driven losses, led by a sharp revival in technology stocks. Brent crude surged $4.24 a barrel to $106.15, while the US benchmark crude advanced $4.29 to $97.25 per barrel, amid renewed fears of supply disruption.

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On the supply side, EIA data revealed declines in US inventories across key refined products, pointing to solid demand from both domestic consumption and export markets.