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US stock futures inch lower as investors assess Mideast developments
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US stock futures inch lower as investors assess Mideast developments
Apr 7, 2026 5:12 AM

April 7 (Reuters) - U.S. stock index futures ticked lower on Tuesday as investors assessed comments that indicated the Middle East conflict could escalate, ahead of President Donald Trump's deadline for Iran to reopen the Strait of Hormuz.

A report said Iran's Kharg Island, a hub of its oil exports, was targeted with several strikes, while Iran's Revolutionary Guards warned neighboring countries of strikes on infrastructure of the U.S. and its allies that could disrupt energy supplies for years.

The comments come ahead of Trump's Tuesday deadline to reopen the Strait of Hormuz, which Tehran refused. A senior Iranian source told Reuters that talks on lasting peace could begin only after an end to the strikes.

"Either there is a climbdown on the part of Washington or Tehran, which could prompt a major rally in equities and easing of energy prices, or a major escalation with all the implications that might have for financial markets," said Dan Coatsworth, head of markets at AJ Bell.

Global markets have been battered by the conflict that is now in its second month, with investors stuck between comments suggesting an escalation and reports indicating negotiations to end the war.

At 7:17 a.m. ET, Dow E-minis were down 156 points, or 0.33%, S&P 500 E-minis were down 22.25 points, or 0.33% and Nasdaq 100 E-minis were down 114.5 points, or 0.47%.

Meanwhile, the U.S. said on Monday it would raise payments to private insurers offering Medicare Advantage plans to older adults in 2027 by 2.48% on average, an increase from the near-flat change proposed earlier.

Shares of health insurers surged in premarket trading, with UnitedHealth up 6%, Humana gaining 9.6% and CVS Health adding 7%.

Wall Street's main indexes closed higher on Monday, marking the fourth consecutive session of gains for the S&P 500 and the Nasdaq, as investors digested the Middle East developments and positioned for the upcoming quarterly earnings season.

The S&P 500 has lost more than 4% since the conflict in the Middle East erupted, just after the index was finding its footing following a selloff, especially in private credit and software firms, on fears of AI-driven disruption.

On Monday, UBS Global Wealth Management trimmed its S&P 500 end-2026 target to 7,500 from 7,700.

This week, markets will scrutinize some inflation readings to see if the elevated crude prices stemming from the conflict have impacted price pressures in the economy.

The Iran war has complicated the interest rate outlook for the Federal Reserve as it grapples with fears of revived inflation against the backdrop of a resilient labor market.

Comments from Fed policymakers Austan Goolsbee, Philip Jefferson and Mary Daly will be parsed through the day for clues on the future policy path.

Among other premarket movers, Broadcom shares gained 3.4% after the chipmaker signed a long-term deal with Alphabet's Google to develop its AI chips and other components.

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