U.S. stock index futures edged lower in Thursday’s holiday-thinned session as geopolitical and monetary policy risks dampened investor sentiment. S&P 500 Futures dropped 0.2% to 6,022.0, Nasdaq 100 Futures slipped 0.2% to 21,904.25, and Dow Jones Futures declined 0.3% to 42,392.0.
Markets remained cautious after President Donald Trump delayed a decision on potential U.S. military action against Iran, amid escalating tensions with Israel. The White House confirmed that Trump will decide on U.S. involvement within two weeks, keeping investors on edge. Despite considering direct strikes, Trump has also hinted at possible nuclear negotiations with Tehran, although he remains firmly opposed to Iranian nuclear enrichment.
The Israel-Iran conflict, now in its eighth day, has triggered risk-off sentiment across global markets, with concerns mounting over a broader Middle East war. The situation has also pushed oil prices higher, raising fears of energy-led inflation.
Adding to the uncertainty, the Federal Reserve kept interest rates steady on Wednesday but signaled fewer rate cuts in 2026. Fed Chair Jerome Powell maintained a data-driven stance and highlighted persistent inflation risks, partly due to Trump’s proposed tariffs. While the Fed still projects two rate cuts in 2025, markets were disappointed by the more cautious long-term outlook.
Wall Street remained rangebound during the shortened week. The S&P 500 ended Wednesday nearly flat at 5,980.87, the Nasdaq Composite ticked up 0.1% to 19,546.27, and the Dow Jones dipped 0.1% to 42,171.66.
With the combination of geopolitical tension, rising oil prices, and hawkish Fed signals, investor caution remains high. Markets are likely to stay volatile as they await further clarity on U.S. foreign policy decisions and inflation trajectory.


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