Market Analysis

The major U.S. Index futures are currently pointing to a slightly lower open on Thursday, with stocks likely to move back to the downside after ending yesterday’s choppy trading session modestly higher.

A rebound by the price of crude oil may weigh on Wall Street amid concerns about a re-escalation of the conflict between the U.S. and Iran.

U.S. crude oil futures are surging by more than 2 percent on the day after plunging by more than 8 percent over the two previous sessions.

The sharp increase by the price of crude oil comes after reports the U.S. launched another round of “self-defense strikes” in southern Iran, leading Tehran to retaliate by purportedly targeting a U.S. air base.

“Investors are still broadly positioned for a de-escalation scenario in the Middle East, but recent headlines are a reminder that the path toward any agreement remains fragile,” said Daniela Hathorn, Senior Market Analyst at Capital.com.

The futures regained ground following the release of a report from the Commerce Department showing consumer prices in the U.S. increased by slightly less than expected in the month of April.

The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.4 percent in April after climbing by 0.7 percent in March. Economists had expected prices to increase by 0.5 percent.

The report also said the annual rate of growth by the PCE price index accelerated to 3.8 percent in April from 3.5 percent in March, in line with estimates.

Excluding food and energy prices, the core PCE price index crept up by 0.2 percent in April after rising by 0.3 percent in March. Core prices were expected to rise by another 0.3 percent.

The annual rate of growth by the core PCE price index ticked up to 3.3 percent in April from 3.2 percent, matching expectations.

A separate report released by the Labor Department showed first-time claims for U.S. unemployment benefits rose by slightly more than expected in the week ended May 23rd.

Stocks turned in a relatively lackluster performance during trading on Wednesday but managed to end the day modestly higher. The Dow led the way higher, reaching a new record closing high along with the Nasdaq and S&P 500.

The major averages all ended the day in positive territory. The Dow climbed 182.60 points or 0.4 percent to 60,644.28, the Nasdaq inched up 18.55 points or 0.1 percent to 26,674.73 and the S&P 500 crept up 1.24 points or less than a tenth of a percent to 7,520.36.

The choppy trading on Wall Street came as traders expressed some uncertainty about the near-term outlook for the markets following recent strength.

Traders may also have been waiting for further developments with a regard to a potential U.S.-Iran peace deal, although confidence remains high that an agreement will be reached soon.

Optimism about an eventual end to the conflict between the U.S. and Iran continues weigh on oil prices, with U.S. crude oil futures plunging by more than 5 percent.

Speaking to reporters at the White House, President Donald Trump stated that Iran wants to make a deal but said the U.S. is not satisfied with their offers and asserted that the Strait of Hormuz should be open for everybody.

Secretary of State Marco Rubio also said the U.S. will give the diplomatic route "every chance to succeed" but reiterated that Trump has other options.

Oil prices remained sharply lower even after the White House denied a report Iranian state TV had obtained a draft of an initial, unofficial framework for a memorandum of understanding between the U.S. and Iran.

Under the framework, Iran would restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, according to the report from Reuters.

Despite the lackluster performance by the broader markets, airline stocks extended the substantial upward move seen over the past several sessions, with the NYSE Arca Airline Index surging by 2 percent.

Considerable strength was also visible among telecom stocks, as reflected by the 1.6 percent gain posted by the NYSE Arca North American Telecom Index.

Computer hardware, housing and retail stocks also saw notable strength, while oil service stocks moved sharply lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 3.3 percent.

A steep drop by the price of gold also weighed on gold stocks, with the NYSE Arca Gold Bugs Index plunging by 3.3 percent.

Commodity, Currency Markets

Crude oil futures are surging $2.06 to $90.74 a barrel after plummeting $5.21 to $88.68 a barrel on Wednesday. Meanwhile, after slumping $53.50 to $4,481.50 an ounce in the previous session, gold futures are sliding $49.30 to $4,432.10 an ounce.

On the currency front, the U.S. dollar is trading at 159.33 yen versus the 159.51 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1633 compared to yesterday’s $1.1624.

Asia

Asian stocks fell from record highs on Thursday as investors weighed mixed signals from Washington and Tehran about a deal to end the war and reopen the Strait of Hormuz.

The U.S. conducted fresh self-defense strikes in southern Iran and Tehran also targeted strikes on a U.S. air base, driving up global oil prices and reviving inflation concerns.

Brent crude futures rose over 2 percent toward $97 a barrel in Asian trading after having fallen more than 5 percent in the previous session.

The dollar firmed to a one-week high, while gold fell more than 1 percent to trade below $4,400 an ounce ahead of U.S. PCE inflation data later in the day, expected to show an acceleration in price pressures.

China's Shanghai Composite Index edged up by 0.1 percent to 4,098.64 after a choppy session. Hong Kong's Hang Seng Index tumbled 1.3 percent to 25,006.16, dragged down by technology heavyweights such as Alibaba, Meituan and Tencent Holdings.

Japanese markets declined on worries that higher energy costs could lead to a gradual tightening of monetary policy. Profit taking in tech names also weighed on markets.

The Nikkei 225 Index fell 0.5 percent to 64,693.12 while the broader Topix Index settled 0.4 percent lower at 3,902.01.

Seoul stocks ended lower to snap a four-day winning streak as artificial intelligence-related stocks came under selling pressure following their recent rally.

The Kospi dropped 0.5 percent to 8,185.29 after closing at a new record high the previous day. Samsung Electronics fell 2.4 percent and SK Square lost 3.1 percent, while SK Hynix added 2.1 percent.

Earlier in the day, the Bank of Korea kept its benchmark Indexes unchanged for the eighth straight time, signaling a pivot toward tighter monetary policy as inflationary pressures build.

Australian markets fell sharply, with rate-sensitive banking and real estate stocks coming under selling pressure on concerns about stubbornly high inflation and elevated oil prices.

The benchmark S&P/ASX 200 Index slumped 1.4 percent to 8,592.90, while the broader All Ordinaries Index ended 1.4 percent lower at 8,819.60.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.2 percent to close at 13,206.11, reversing morning gains.

Europe

European stocks have moved lower on Thursday after the U.S. conducted fresh self-defense strikes in southern Iran and Tehran also targeted a U.S. air base, driving up global oil prices and reviving inflation concerns.

While the U.K.’s FTSE 100 Index is down by 1 percent, the French CAC 40 Index and the German DAX Index are both down by 0.6 percent.

Airline stocks have succumbed to selling pressure, as Brent crude prices jumped nearly 3 percent to $97 a barrel on escalating tensions between the United States and Iran.

Johnson Matthey shares have also fallen. The British specialty chemicals group has agreed to acquire U.S. emissions catalyst maker CORMETECH for an enterprise value of $360 million in cash.

Energy firm SSE has also declined after reporting a 5 percent decrease in adjusted earnings per share for the year ended March 31, 2026.

BT has also tumbled after reports emerged that the British government would oppose any attempt from Sunil Bharti Mittal to raise his stake in the telecoms company beyond 25 percent.

Meanwhile, semiconductor materials maker Soitec has soared after its annual sales beat forecasts. Peers ST Microelectronics and Infineon have also jumped

U.S. Economic News

A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits rose by slightly more than expected in the week ended May 23rd.

The Labor Department said initial jobless claims climbed to 215,000, an increase of 5,000 from the previous week's revised level of 210,000.

Economists had expected jobless claims to rise to 213,000 from the 209,000 originally reported for the previous week.

The report said the less volatile four-week moving average also rose to 209,000, an increase of 6,250 from the previous week's revised average of 202,750.

The Commerce Department released a report on Thursday showing consumer prices in the U.S. increased by slightly less than expected in the month of April.

The report said the personal consumption expenditures (PCE) price index rose by 0.4 percent in April after climbing by 0.7 percent in March. Economists had expected prices to increase by 0.5 percent.

The Commerce Department also said the annual rate of growth by the PCE price index accelerated to 3.8 percent in April from 3.5 percent in March, in line with estimates.

Excluding food and energy prices, the core PCE price index crept up by 0.2 percent in April after rising by 0.3 percent in March. Core prices were expected to rise by another 0.3 percent.

The annual rate of growth by the core PCE price index ticked up to 3.3 percent in April from 3.2 percent, matching expectations.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income was virtually unchanged in April after climbing by 0.5 percent in March, while personal spending grew by 0.5 percent in April after jumping by 1.0 percent in March.

A report released by the Commerce Department on Thursday showed new orders for U.S. manufactured durable goods soared by much more than expected in the month of April.

The Commerce Department said durable goods orders spiked by 7.9 percent in April after jumping by an upwardly revised 1.3 percent in March.

Economists had expected durable goods orders to surge by 2.8 percent compared to the 0.8 percent increase that had been reported for the previous month.

Excluding orders for transportation equipment, durable goods orders shot up by 1.1 percent in April, matching an upwardly revised increase in March. Ex-transportation orders were expected to climb by 0.4 percent.

At 10 am ET, the Commerce Department is scheduled to release its report on new home sales in the month of April. New home sales are expected to decrease to an annual rate of 662,000 in April from an annual rate of 682,000 in March.

St. Louis Federal Reserve President Alberto Musalem is due to speak on the U.S. economy and monetary policy before the Reykjavik Economic Conference 2026 at 10:15 am ET.

At 12 pm ET, the Energy Information Administration is scheduled to release its report on oil inventories in the week ended May 22nd. Crude oil inventories are expected to tumble by 5 million barrels.

The Treasury Department is due to announce the results of this month’s auction of $44 billion worth of seven-year notes at 1 pm ET.

At 3 pm ET, Richmond Federal Reserve President Thomas Barkin is scheduled to participate in a moderated fireside chat before the “Leading with AI: Building Trust and Powering Growth” conference.