US equity futures fell sharply on Tuesday after the long weekend, as rising energy prices darkened the profit outlook and increased the risk of higher interest rates. Futures on the S&P 500 and Nasdaq 100 were down 0.5%, while Dow Jones Industrial Average contracts declined nearly 1%.
Fresh clashes between the US and Iran reinforced expectations of prolonged disruptions to fuel exports from the Persian Gulf. At the same time, attacks by Houthi forces damaged Saudi energy infrastructure, weighing on the country’s production capacity.
Funding costs for US corporates also rose, reflecting more hawkish signals from the Bank of Japan and the prospect that Japan may sell US Treasuries to support the yen. Credit‑sensitive hyperscalers came under pressure, with Microsoft and Alphabet each down about 1%, and Amazon also falling 1% ahead of its planned sterling bond issuance.
AI-focused companies have increasingly tapped non‑dollar debt markets, as US dollar bond markets already face a surge in AI‑related issuance. In contrast to broader weakness in tech, Oracle gained 4.5% in the run‑up to its earnings release later this week.
