Dow futures fall 80 pts amid geopolitical tensions with Trump signalling possible US strike on Tehran

US stock futures edged lower on Friday as investors remained on edge amid escalating Middle East tensions and rising speculation about direct American military involvement. Futures linked to the Dow Jones Industrial Average were down 83 points, or 0.2 percent, while S&P 500 and Nasdaq 100 futures also dipped 0.2 percent each in early trade.

The cautious mood follows US President Donald Trump’s deliberation over a potential strike on Tehran, with the White House indicating a decision may be taken in the next two weeks. The development marks a new phase in the ongoing conflict between Israel and Iran, and markets are struggling to price in the full scale of potential disruption.

Oil prices reflected the volatility, with Brent crude falling nearly 2 percent, even as US crude gained 0.7 percent in early trade. Reports suggest Israeli Prime Minister Benjamin Netanyahu has ordered strikes on “strategic” and “government” targets in Iran.

David Seif, chief economist for Developed Markets at Nomura, noted, “Powell by design left optionality open, saying we don’t know what the impact of the tariffs is going to be. That seems like a fair statement when you’ve had the largest increase in tariffs that the US has seen in 95 years.” These concerns are compounded by recent survey data indicating rising inflation expectations among c

Adding to market anxiety was the Federal Reserve’s stance earlier this week. Chair Jerome Powell reiterated the central bank’s cautious approach on rate cuts, keeping policy unchanged and stressing a data-dependent outlook. While US markets were shut Thursday for Juneteenth, stocks had closed lower on Wednesday following Powell’s comments.

Powell’s remarks drew sharp criticism from President Trump, who labeled the Fed Chair “destructive” in a Truth Social post, claiming delayed rate cuts were costing the US “hundreds of billions of dollars.” This ongoing tension between Trump and Powell has added another layer of uncertainty, with traders pricing in only a 59% chance of a 25-basis-point rate cut by September 2025, according to CME Group’s FedWatch tool. Saxo Bank analysts highlighted that the Fed’s cautious outlook, combined with geopolitical risks, has muted expectations for near-term rate cuts.

Trump, for his part, renewed criticism of Powell, blaming delayed rate cuts for costing the economy “hundreds of billions of dollars.”

On a weekly basis, the S&P 500 is marginally higher, up 0.07 percent, while the Nasdaq has gained about 1 percnet. The Dow, however, is down 0.06 percent.

Investors are also tracking fresh economic data, including the Philadelphia Fed’s manufacturing index and the Conference Board’s leading economic indicators, both due Friday.

Global equities were mixed. In Asia, China kept key benchmark lending rates steady, while South Korea’s Kospi surged past the 3,000 mark for the first time in over three years. Japan’s Nikkei ended slightly lower amid hotter-than-expected inflation data. India’s Nifty 50 and Sensex were both up over 1 percent in afternoon trade.