Wall Street Futures Plummet Up to 2% on Trump's Latest Iran War Statement

US Markets Point to Weak Opening as Tensions Rise in West Asia

Wall Street futures declined up to 2 percent on Thursday evening India time, indicating a weak opening for US markets at around 7 pm IST. This downturn follows the sharp gains seen in the US markets on Wednesday. The US markets had closed sharply higher on Wednesday, with the S&P 500, Dow Jones Industrial Average, and Nasdaq-100 all posting significant gains.

The decline in futures can be attributed to US President Donald Trump's hardline remarks, which dampened hopes of an early reopening of the Strait of Hormuz and a resolution to the ongoing conflict in West Asia. Trump's comments highlighted the ongoing tensions between the US and Iran.

Futures linked to the Nasdaq-100 were down 1.97 percent at around 6 pm IST, while futures of the S&P 500 declined 1.51 percent and those of the Dow Jones Industrial Average fell 1.38 percent.

Read also: SpaceX Seeks Record $75 Billion IPO, Potentially Positioning Elon Musk as the World's First Trillionaire

Meanwhile, Brent crude prices rose above USD 109 per barrel, while the Cboe Volatility Index moved up to around 27. The yield on the 10-year US Treasury climbed to 4.37 percent.

In an address from the White House, Trump said Washington's core strategic objectives in Iran were nearing completion. However, he added that the US would hit Iran "extremely hard" over the next two to three weeks. Trump did not indicate any timeline for the end of the conflict or offer clarity on reopening the Strait of Hormuz, which has disrupted global financial markets.

Global markets also reflected the uncertainty caused by the ongoing conflict. Asian markets ended mostly lower, with South Korea's Kospi falling 4.47 percent, Japan's Nikkei 225 declining 2.4 percent, Shanghai's SSE Composite slipping 0.74 percent, and Hong Kong's Hang Seng dropping 0.7 percent.

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

European markets were also trading in the red, with Germany's DAX down 1.71 percent, France's CAC 40 falling 0.98 percent, and the UK's FTSE 100 slipping 0.12 percent.

However, domestic equity benchmarks in India recovered from early losses to end higher on Thursday. The Sensex rose 185.23 points or 0.25 percent to close at 73,319.55, while the Nifty gained 33.70 points or 0.15 percent to settle at 22,713.10.

The Sensex had dropped 1,588 points in early trade to hit a low of 71,545.81 before rebounding over 2,000 points. It later touched a high of 73,568.54 in late trade. Buying in IT and banking shares, including HCL Tech, TCS, HDFC Bank, and ICICI Bank, supported the recovery.

The Nifty also followed a similar pattern, falling 496.85 points in early trade before recovering to hit a high of 22,782.30.

The rupee also rebounded sharply after the Reserve Bank took steps to curb activity in the onshore forward market. The currency strengthened by 188 paise during the day to briefly touch the 92 level against the US dollar before settling over 150 paise higher.