Wall Street futures slip as US-Iran tensions cloud Middle East peace prospects

Wall Street futures have dipped today as US-Iran tensions cast fresh doubt over peace in the Middle East, marking a cautious start to the second half of the year, while investors awaited commentary from Federal Reserve Chair Kevin Warsh.

Tehran said it would not meet with top US envoys who flew to the region following ​an outbreak of hostilities, suggesting that a breakthrough in peace negotiations may not be imminent.

However, a source with direct knowledge of the talks as well as an Iranian official said the US and Iran held technical talks in Doha on Wednesday.

Repeated false dawns and contrasting rhetoric in negotiations have made the war situation difficult to track, leading some investors to focus instead on the economy’s underlying pillars.

But premarket declines indicate that the Middle East war remains difficult to ignore, especially given the impact the region has on global energy markets.

At 07:05 a.m. ET, Dow E-minis YMcv1 fell 109 points, or 0.21%, S&P 500 E-minis EScv1 lost 8.75 points, or 0.12%, and Nasdaq 100 E-minis NQcv1 shed 91.5 points, or 0.3%.

Investors are also worried the US Federal Reserve may need to hike rates and keep them elevated to control inflation.

Traders expect the central bank to raise rates at least once by the end of the year, according to data compiled by LSEG.