Nasdaq-100 futures dropped approximately 1.7% Thursday morning as rising tensions between Washington and Tehran fueled a broader selloff in technology stocks. Brent crude climbed above $112 per barrel amid renewed attacks on Middle East energy infrastructure and fears of further U.S. military action against Iran. President Donald Trump previously warned that major developments involving Iran could be approaching, raising uncertainty over whether Washington would pursue military escalation or a diplomatic agreement. The S&P 500 futures fell around 1%, while Dow futures declined 0.6%.
Higher oil prices threaten to reignite inflation pressures, potentially forcing the Federal Reserve to keep interest rates elevated for longer. That presents another challenge for technology stocks, particularly high-growth AI companies sensitive to borrowing costs and investor risk appetite.
Geopolitical tensions are adding to existing concerns about AI profitability following earnings reports from Meta and Tesla.
Despite better-than-expected earnings, investors remain worried about rising capital expenditures and whether massive AI investments will generate sufficient returns.
With oil prices climbing and uncertainty surrounding Iran intensifying, Wall Street faces pressure from both inflation fears and technology-sector valuations.