FX.co ★ US Futures Pull Back Sharply

US equity index futures fell sharply on Tuesday amid mounting concerns that restrictive financial conditions will weigh on economic growth. Contracts tied to the S&P 500 and Dow Jones Industrial Average were down 0.5%, while Nasdaq 100 futures dropped more than 1%.

Heightened geopolitical tensions in the Persian Gulf, including strikes between the US and Iran, extended the disruption of energy exports from the region and amplified inflationary risks for the global economy. This reinforced expectations that major central banks may resume interest rate hikes later this year.

At the same time, a surge in AI-related corporate bond issuance boosted overall credit supply and pushed yields higher, further tightening financial conditions. Technology shares led the declines, with Marvell, Intel, and Sandisk each shedding more than 2.5%, while Amazon, Tesla, and Nvidia fell over 1%.