Investors react to stalled U.S.-Iran peace talks and Fed rate hike expectations, dragging Dow, S&P 500, and Nasdaq 100 futures lower.
U.S. stock index futures opened the second half of 2026 on a cautious note, retreating as geopolitical risks in the Middle East resurfaced. Dow E-minis fell 137 points, or 0.26%, while S&P 500 E-minis declined 0.3% and Nasdaq 100 E-minis dropped 0.54% by 5:20 a.m. ET. Tehran’s refusal to meet U.S. envoys dimmed hopes for a near-term resolution, amplifying concerns over energy market disruptions.
The pullback follows a period of mixed signals in U.S.-Iran negotiations, with prior setbacks eroding investor confidence. Meanwhile, Fed Chair Kevin Warsh’s upcoming remarks are in focus, as traders price in at least one rate hike by year-end. Tuesday’s data showed U.S. job openings rising to a two-year high in May, reinforcing expectations for a hawkish Fed stance.
Markets remain sensitive to both geopolitical and monetary policy risks, with energy prices and inflation dynamics likely to drive near-term volatility.