US Stock Market Ends Lower Amid Ongoing Middle East Tensions

US Stock Futures Slip as Middle East Tensions Escalate

US stock futures indicated a muted-to-negative start to Tuesday's session on June 2, as investors continued to monitor developments in the Middle East, which had recently triggered a sharp rally in crude oil prices.

The S&P 500 futures slipped 0.2% after the benchmark recorded an eight-session winning streak, while weakness in technology stocks dragged Nasdaq futures lower by 0.1%. Dow Jones Industrial Average futures also traded marginally lower by 0.4%. In the previous session, both the S&P 500 and Nasdaq had scaled fresh record highs, driven largely by gains in chip stocks.

Tensions in the Middle East resurfaced after hopes of a near-term resolution between the US and Iran faded following fresh exchanges of attacks over the weekend. In the aftermath, Iran reportedly said it would suspend the exchange of messages with the US in response to Israel's intensifying military operations in Lebanon.

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Despite the recent tensions, US President Donald Trump remained optimistic that the US could reach an interim peace agreement with Iran "over the next week." Trump also said a memorandum of understanding to reopen the Strait of Hormuz could be reached, although several issues remain unresolved.

As AI-driven optimism continues to support global equities, AI startup Anthropic said on Monday that it had confidentially filed for a US initial public offering (IPO), moving ahead of rival OpenAI in the closely watched race to enter public markets.

A cooling in bond yields after recently touching multi-year highs has also supported market sentiment. However, expectations that the US Federal Reserve could keep interest rates elevated for longer in 2026 continue to remain high.

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Crude oil prices gave up nearly half of Monday's gains after US President Donald Trump said negotiations with Iran were continuing at a "rapid pace," easing fears that talks had completely broken down. Brent crude futures fell $2.17 to the day's low of $92.81 per barrel, while WTI crude futures slipped $2.04 to the day's low of $90.12 per barrel.

In the previous session, both Brent and WTI crude had surged up to 5.5%, marking their biggest single-day gains in nearly a month.