Nasdaq futures slump 290 points as US-Iran escalation hits chip stocks

Nasdaq 100 futures slid 0.9%, or about 290 points, as US-Iran hostilities triggered a selloff in chip stocks and drove crude above $73.

"The Strait closure will hang over the market with a risk-off tone," said Ben Emons, founder of Fed Watch Advisors. "Still, unless there is a serious prospect of a closure in the coming months, which could cause major global energy shortages … the focus next week will also be on CPI, Warsh, and bank earnings."

S&P 500 futures lost 0.3%, while Dow Jones Industrial Average futures hovered near the flatline, reflecting a rotation away from growth-sensitive technology names into defensive sectors. Semiconductor stocks bore the brunt of the selling: US-listed shares of SK Hynix, which debuted on the Nasdaq on Friday with a 13% surge, fell 8% in premarket trading. Micron Technology and Sandisk each dropped 4%, Seagate Technology lost 3%, and Advanced Micro Devices and Intel both declined 2%.

The selloff arrives at a critical juncture for equity markets, with 28 S&P 500 companies — including JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo — set to report quarterly results this week. Analysts estimate second-quarter S&P 500 profits grew more than 23% year over year, according to FactSet, making the earnings season a potential inflection point if geopolitical risks persist.

Iran and the US traded airstrikes over the weekend after Tehran attacked a commercial ship transiting the Strait of Hormuz, prompting President Donald Trump to order retaliatory strikes on Saturday. Iran declared the waterway closed, though Trump disputed the claim, saying it remained open to commercial traffic. West Texas Intermediate crude rose 3% to $73.83 a barrel after touching $75.08 overnight, while Brent climbed 3% to $78.52, reaching as high as $79.80.

The Strait of Hormuz is a critical chokepoint for global oil supplies, and any sustained disruption could push crude prices significantly higher, squeezing corporate margins and complicating the Federal Reserve's inflation fight. Energy stocks were the lone bright spot in premarket trading, with oil producers gaining alongside the jump in crude prices. The June consumer price index report, due Tuesday, will provide the next major macro test before the Fed's July meeting, with economists watching for any signs that energy costs are feeding through to core inflation.

Beyond the macro calendar, investors will parse commentary from big bank earnings for signs of how credit conditions are evolving against a backdrop of elevated rates and geopolitical uncertainty. Netflix, Johnson & Johnson and UnitedHealth are also among the major names reporting this week. Raymond James CIO Larry Adam said tech will be the sector to watch, specifically whether artificial intelligence can sustain profit growth. "Despite concerns that hyperscalers may start to moderate AI-related capital spending, we expect capex plans to be reaffirmed and to rise through 2028," Adam wrote to clients. "Mentions of AI across all 11 sectors are up 98% year over year, reaching new highs."

The global selloff extended across regions. European markets edged lower, with the Stoxx 600 down 0.1%, as oil and gas names gained while semiconductor stocks tracked Asian peers into the red. In Asia, South Korea's Kospi tumbled nearly 9%, dragged by SK Hynix's slide, while Japan's Nikkei 225 lost 1.9% and China's CSI 300 fell 1.8%.

This article is for informational purposes only and does not constitute investment advice.