By Ragini Mathur and Avinash P
July 8 (Reuters) – Wall Street’s main indexes were set to open lower on Wednesday after President Donald Trump said an interim deal aimed at ending the war with Iran was “over,” sending oil prices higher and triggering a global risk-off move.
Speaking in Ankara, where he was attending a NATO summit, Trump said he had no interest in engaging further with Iran.
His remarks marked the latest turn in a conflict where rhetoric from the U.S. and Iran has repeatedly swung between military escalation and diplomacy. Investors have been wrong-footed several times by false dawns – when hopes for a lasting peace deal rose, only to fade without resolution.
“The million-dollar question is whether this marks a complete breakdown in negotiations and a return to hostilities, or merely a temporary setback,” said Matthew Ryan, head of market strategy at Ebury.
Oil prices extended gains on Wednesday following Trump’s remarks, with Brent crude futures and U.S. West Texas Intermediate crude futures both rising more than 4%.
“It’s a big wake-up call for the markets because the expectation was that following the MOU, we were likely to start to see the flow of oil coming back into the markets. And we saw inflation expectations being dialed down,” said Aneeka Gupta, director of macroeconomic research at WisdomTree.
The jump in crude prices lifted energy stocks in premarket trading. Chevron rose 1.5%, Exxon Mobil gained 1.3% and ConocoPhillips advanced 1.8%.
Devon Energy climbed 1.6%, while Occidental Petroleum, APA Corp and Diamondback Energy were up 2.2%, 2.1% and 1.7%, respectively.
Travel stocks fell as higher oil prices stoked concerns over fuel costs and demand.
United Airlines dropped 3%, Southwest Airlines lost 2.1% and Delta Air Lines fell 2.4%.
Cruise operators also slipped, with Carnival down 2.2%, Royal Caribbean 2.2% and Norwegian Cruise Line 2.7%.
At 08:48 a.m. ET, Dow E-minis were down 443 points, or 0.83%, and S&P 500 E-minis were down 39.25 points, or 0.52%. Nasdaq 100 E-minis were down 201.25 points, or 0.68%.
Small-cap Russell 2000 index futures fell 0.6%. The CBOE Volatility Index, Wall Street’s fear gauge, hit an over one-week high, climbing 1.3 points to 17.45.
The latest escalation threatened to unsettle the equities rally that has carried the benchmark S&P 500 up about 10% so far this year, despite sharp declines earlier in 2026 due to the Iran conflict. A renewed jump in oil prices could revive inflation concerns and further complicate the Federal Reserve’s path.
The Fed’s June policy meeting minutes are due later in the session. The readout could offer better clues on how policymakers are assessing inflation risks and economic growth.
According to CME’s FedWatch tool, markets are currently pricing in at least one rate hike by the end of 2026.
Technology stocks were also under pressure after a volatile stretch for the sector in recent weeks.
Broadcom pared declines and turned positive to trade 0.2% higher after Apple said it plans to spend more than $30 billion as part of a chip-supply agreement reached earlier this week with the chipmaker.
Other chip stocks were broadly lower, with the iShares Semiconductor ETF down 1.6%.
(Reporting by Ragini Mathur and Avinash P in Bengaluru; Editing by Pooja Desai and Shinjini Ganguli)
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