Dow Jones futures decline on Middle East tensions, massive AI investment concerns

Dow Jones futures lose 0.56% to trade around 52,160 during European trading hours on Thursday. Meanwhile, S&P 500 futures and Nasdaq 100 futures decline 0.54% and 0.74%, trading near 7,500 and 28,960, respectively.

US index futures fall as traders adopt caution amid rising Middle East tensions, spiking after US President Donald Trump threatened strikes on Iranian infrastructure over Strait of Hormuz ship attacks, drawing threats of retaliation from Tehran against US-linked energy assets. Meanwhile, Iran-backed Houthi militants fired missiles and drones at two Saudi oil tankers in the Red Sea. The first direct strikes on tankers in this waterway threaten a key alternative export route for Saudi crude and open a dangerous new front in the conflict.

Market sentiment also turned sour on shifting policy expectations and unclear guidance from new Fed Chair Kevin Warsh have added an extra layer of uncertainty. However, markets broadly expect the Federal Reserve (Fed) to leave interest rates unchanged at its upcoming meeting, though a 25-basis-point rate hike is widely expected in September.

Wall Street slipped during Wednesday’s regular session, led lower by a 0.57% drop in the tech-heavy Nasdaq Composite. The S&P 500 fell 0.14%, while the Dow Jones finished virtually flat, down 0.01%. US stock indexes was dragged down by rising oil prices, fresh corporate earnings, and persistent worries over massive AI investments.

Alphabet shares sank over 3% in extended trading after the Google parent company raised its 2026 capital expenditure forecast to as high as $205 billion to meet surging AI demand. The higher spending target fed into growing investor anxiety over whether Big Tech’s aggressive AI investments will pay off, per CNBC.