Investing.com – U.S. stock futures edge lower after a strong rally on Wall Street driven by hopes that a U.S.-Iran peace deal could hold. Oil prices continue to retreat as traders bet the reopening of the Strait of Hormuz will help restore global crude supplies, although the abrupt cancellation of planned U.S.-Iran nuclear talks is raising questions about the durability of the agreement.
1. U.S. markets closed for Juneteenth holiday
Stocks on Wall Street will be closed for the Juneteenth holiday on Friday, after they rose in the prior session following the signing of an interim peace deal between the U.S. and Iran.
Equities rebounded after slumping on Wednesday in the wake of a Federal Reserve interest rate decision which signaled a potentially hawkish tilt in the central bank’s policy outlook. The benchmark S&P 500 gained 1.1%, the blue-chip Dow Jones Industrial Average inched up by 0.1%, and the tech-heavy Nasdaq Composite jumped 1.9%.
Chipmakers were among the biggest winners after President Donald Trump said Apple had agreed to work with Intel to develop chips in the United States. The news boosted sentiment around the semiconductor sector, which remains one of the market’s biggest drivers.
A key question for investors is “whether markets have become too comfortable with the assumption that geopolitical risks are fading,” said Laurence Booth, Global Head of Markets at CMC Markets.
“Recent gains in equities have been supported by expectations of de-escalation, but stalled negotiations suggest the underlying issues remain unresolved. That leaves markets vulnerable to any deterioration in sentiment heading into next week.”
2. U.S.-Iran talks called off
Fresh peace talks between the United States and Iran were unexpectedly cancelled, raising new questions around the durability of the recent ceasefire agreement.
The talks, which were scheduled to take place in Switzerland on Friday, were called off shortly after U.S. Vice President JD Vance withdrew from the meeting. The discussions were expected to revolve around Iran’s nuclear program, building on a memorandum of understanding signed by both countries to end their recent conflict.
Iranian media reported that Tehran wants clearer evidence that Washington is implementing the terms of the agreement before committing to another round of negotiations. While the cancellation does not necessarily mean the peace deal is collapsing, it highlights that tensions between the two countries are still unresolved.
Fears remain that a renewed conflict could put pressure on energy supplies, reignite inflation concerns, and create volatility across global markets.
3. Oil heads for biggest weekly loss in months
Oil prices fell again in London trading on Friday and were on track for their sharpest weekly decline in months, as the U.S.-Iran deal boosted anticipation for a potential influx of oil supplies.
Brent crude futures last fell 1.1% to $79.01 per barrel, while U.S. West Texas Intermediate crude slipped 0.7% to $76.05 per barrel.
Both benchmarks are set to lose nearly 10% this week and are trading near their lowest levels since early March. The U.S.-Iran conflict first began in late February.
Crucially, the U.S.-Iran agreement calls for the gradual reopening of the Strait of Hormuz, a vital waterway for roughly a fifth of the world’s oil and liquefied natural gas that has been effectively shuttered throughout much of the war.
4. ASML faces U.S. scrutiny – Bloomberg
Shares of Dutch semiconductor equipment maker ASML dipped in early European trading, after U.S. officials reportedly raised concerns about whether one of the company’s most advanced chipmaking machines may have ended up in China.
According to Bloomberg News, U.S. Commerce Secretary Howard Lutnick recently told ASML executives that Washington was worried that an extreme ultraviolet, or EUV, lithography machine could be operating in China despite export restrictions.
ASML rejected the suggestion, saying it has never shipped an EUV system to China and that none of the machines are located there.
The development underscores ongoing tensions between the United States and China over advanced semiconductor technology. Washington has spent years restricting China’s access to cutting-edge chipmaking tools in an effort to limit its technological capabilities.
5. Pentagon seeks $80 billion – WSJ
The U.S. Department of Defense needs roughly $80 billion to cover costs related to the Iran conflict as well as other spending priorities, according to a Wall Street Journal report.
The newspaper said Deputy Defense Secretary Stephen Feinberg informed lawmakers of the funding need during calls this week. A broader supplemental spending request could be sent to Congress in the coming days and may also include funding for farm programs and disaster relief efforts.
While the proposal still requires approval from Congress, investors will be watching closely because large government spending packages can influence federal deficits, Treasury borrowing needs, and ultimately interest rate expectations.
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