Dow Jones futures rose 0.11% to approximately 53,000 during European trading hours on Wednesday, while S&P 500 futures increased 0.16% to near 7,480. In contrast, Nasdaq 100 futures declined 0.17%, trading around 27,870, reflecting a mixed performance among US index futures as traders remain cautious ahead of the Federal Reserve's policy decision and amid renewed hostilities in the Middle East [1].
Geopolitical tensions escalated after the US military reported intercepting a surprise Iranian attack targeting American troops in the region. Iran-backed militias in Iraq launched drone strikes against oil facilities in Saudi Arabia’s Eastern Region for a second consecutive day, though the extent of the damage is unclear. These actions are believed to be retaliation for recent US strikes on Iranian naval assets, prompting CENTCOM to execute precision airstrikes in Iraq against Iran-backed groups planning further operations [1].
Monetary policy uncertainty is also weighing on sentiment. While the Federal Reserve is widely expected to keep interest rates unchanged, traders are pricing in a 31.5% chance of an immediate rate hike and a 79.0% probability of a rate increase in September, suggesting expectations for elevated global borrowing costs in the near future [1].
During Tuesday’s US regular session, the Dow Jones and S&P 500 rose 1.03% and 0.21%, respectively, while the Nasdaq Composite slipped 0.22%. Ford Motor surged in extended trading after beating financial estimates and raising its full-year 2026 outlook. Conversely, SK Hynix fell despite record quarterly profits, as results missed Wall Street expectations. Analysts at Rabobank noted a sharp divergence between semiconductor stocks and value plays, with South Korea’s KOSPI plunging 10.84%—triggering a circuit-breaker—and Taiwan’s TAIEX falling 4.65%, highlighting the deepening semiconductor slump and resilience in broader value-oriented segments [1].
CONCLUSION
Market sentiment remains cautious as traders weigh the impact of renewed Middle East tensions and uncertainty surrounding the Federal Reserve's policy decision. The sharp sell-off in semiconductor stocks, contrasted with gains in value plays, underscores heightened volatility and sector-specific risks. Elevated expectations for future rate hikes and ongoing geopolitical risks suggest continued market turbulence.