Futures contracts linked to major US stock indices are pointing higher as oil prices climb and attention focuses on a slew of crucial economic data. US President Donald Trump says the war with Iran will end after the midterm elections in November, even as he is reportedly told by his top advisers that the conflict could drag on until the end of his term in the White House in early 2029. Results from Oracle and Adobe Systems could offer new insights into the impact of the artificial intelligence boom, while the European Central Bank is expected to raise interest rates following its latest meeting.
1. Futures contracts rise
U.S. stock futures edged higher on Thursday as investors assessed ongoing tensions in the Middle East and braced for key economic data expected later in the week.
By 10:02 a.m., Dow Jones futures had risen by 213 points, or 0.4%, while S&P 500 futures had climbed by 18 points, or 0.2%, and Nasdaq 100 futures had gained by 15 points, or 0.1%.
Major Wall Street indexes fell in the previous session, weighed down by escalating violence between the United States and Iran, which fueled fears of a prolonged closure of the vital Strait of Hormuz. Brent crude, the global benchmark, broke above $100.00 a barrel for the first time since July, raising concerns about an inflationary wave driven by energy prices and tightening monetary policy by central banks. New readings on producer and consumer price growth are due to be released this week.
Fueled by the surge in oil prices, coupled with news that the Treasury would repurchase smaller amounts of government bonds in its latest operation than some analysts had hoped, US Treasury yields rose. The yield on the benchmark 10-year note reached its highest level since 2023 at 4.84%, although yields typically move inversely to prices.
The S&P 500 index also came under pressure, falling for the third consecutive session.
Although we are not yet past the first week of September, the month is already proving its reputation as one of the toughest months for markets, Deutsche Bank analysts said in a research note.
On the individual stock front, Apple shares ended trading lower after the tech giant unveiled a passport-shaped foldable version of its flagship iPhone priced at $1,999.00.
2. Trump: The war with Iran will end after the midterm elections.
Despite the United States and Iran exchanging retaliatory airstrikes in recent days, President Donald Trump told supporters at a rally on Wednesday that the conflict would end after the midterm elections in November.
Although the president himself is not a candidate in this election, polls indicate that the Iran war has damaged Trump's popularity and threatened to affect the results of his Republican Party's midterm elections. Voters have expressed deep frustration with the sharp rise in fuel prices at the pumps following the outbreak of fighting in late February.
Trump accused Tehran of trying to influence the vote, which could lead to Republicans losing control of Congress - an outcome that could have repercussions for the White House's political goals both domestically and internationally.
Trump had previously set deadlines for ending the war, and the temporary ceasefire agreement signed in June proved short-lived. According to the Wall Street Journal, Trump's top advisors warned that the conflict could drag on for the remainder of his presidency, which is scheduled to end in January 2029.
3. Oracle is set to release its results.
Regarding earnings season, the markets will turn their attention to Oracle's results after the markets close on Thursday.
Earlier this year, the cloud computing giant announced plans to spend heavily and increase borrowing in its race to build its artificial intelligence infrastructure.
Oracle has made major deals, including with Meta Platforms and ChatGPT maker OpenAI, all with the aim of competing with its cloud peers such as Microsoft and Amazon in investing in artificial intelligence.
In June, Oracle announced it expects to raise approximately $40 billion from a mix of debt and equity financing next year, up from a previous market share offering of $20 billion. The company also projected capital expenditures of $95 billion for fiscal year 2027, compared to analysts' expectations of $67.66 billion, according to LSEG data cited by Reuters.
4. Adobe Systems' results on the horizon
In a related context, Adobe Systems is also preparing to disclose its results after the US markets close on Thursday.
These would be the first results since the company that developed Photoshop announced the departure of its chief financial officer, Dan Dorn, in June, raising concerns about the company's strategy in countering competitors in the design field and integrating artificial intelligence into its products.
Earlier this year, CEO Shantanu Narayen also stepped down, plunging Adobe Systems' leadership into uncertainty.
However, Adobe Systems raised its annual revenue and profit forecasts, potentially reflecting strong demand for its AI products and tools, despite the threats posed by emerging design companies like Figma and Canva. Recurring annual revenue related to AI surpassed $500 billion by the end of the second quarter.
5. The European Central Bank is expected to raise interest rates.
The European Central Bank is widely expected to raise interest rates following its latest monetary policy meeting today, as policymakers closely monitor the fallout from continued fighting in the Middle East.
The conflict, which erupted with a joint US-Israeli attack on Iran in early February, has led to a sharp rise in energy prices, threatening to keep inflation high worldwide. In Europe, gas prices have reached their highest levels since 2023.
In this context, traders are now fully pricing in a quarter-point interest rate hike by the European Central Bank. ING analysts have described this move as a precautionary increase, or one aimed at bolstering credibility and hedging against any potential spillover or secondary effects from the current energy price shock.
