US equity futures edged higher on Tuesday morning as oil prices retreated from the prior session’s sharp gains, offering some relief to markets rattled by the latest flare-up in the Persian Gulf.
Iran launched missiles and drones at the UAE and attacked US naval vessels guiding commercial ships through the Strait of Hormuz on Monday, sending Brent crude up nearly 6%.
A partial pullback in crude on Tuesday, combined with a strong earnings beat from Pinterest and a report that Apple is exploring chip production talks with Intel, helped stabilise the pre-market tone even as the underlying geopolitical situation remained fragile.
5 things to know before Wall Street opens
1. Futures point higher despite Gulf escalation
Futures pointed to a higher open, with the S&P 500 up 0.27%, the Nasdaq 100 rising 0.4%, and Dow futures gaining 126 points (0.26%).
The advance comes after a bruising Monday session in which the Dow Jones Industrial Average shed 557 points to close at 48,941.90, the S&P 500 slid 0.41% to 7,200.75, and the Nasdaq Composite lost 0.19% to settle at 25,067.80.
2. Brent dips from Monday’s surge but remains elevated
Brent crude futures fell 1.6% to $112.67 a barrel at 6:00 a.m. ET on Tuesday, after settling nearly 6% higher on Monday at $114.44 as Iran attacked UAE oil infrastructure at Fujairah and engaged US military vessels attempting to guide civilian ships through the Strait of Hormuz.
The UAE’s air defence system engaged 12 ballistic missiles, three cruise missiles and four drones during the overnight assault.
3. Pinterest surges on record revenue and strong guidance
Pinterest shares jumped 16.8% in after-hours and pre-market trading after the visual discovery platform posted first-quarter revenue of $1.008 billon, an 18% year-on-year increase that beat analyst estimates by 4.4%.
Global monthly active users rose 11% to an all-time high of 631 million, the platform’s tenth consecutive quarter of double-digit user growth.
4. Apple-Intel chip talks lift Intel; Apple steady
Intel shares (NASDAQ: INTC) rose 3.3% in pre-market trading on Tuesday after Bloomberg reported that Apple had held exploratory talks with Intel and Samsung about producing the main processors for its devices, as the iPhone-maker looks to reduce its dependence on Taiwan Semiconductor Manufacturing Co.
The talks remain at an early stage and have not resulted in any orders, but they reflect Apple’s growing concern about supply chain concentration.
Tim Cook indicated this in last week’s earnings call, as he noted that the company currently has “less flexibility in the supply chain than we normally would.”
5. Earnings strength meets geopolitical caution
The broader earnings season has provided a meaningful floor for equities.
According to a note from BlackRock Investment Institute, US corporate results have been robust across sectors, with the technology complex in particular delivering results that have reinforced confidence in the AI investment cycle.
Analysts caution, however, that even resilient US equities will not be fully insulated if traffic through the Strait of Hormuz remains substantially disrupted.
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