U.S. stock futures were largely unchanged in early trading as investors assessed escalating tensions between the United States and Iran while preparing for a significant week of second-quarter corporate earnings.

S&P 500 futures remained broadly flat at 7,505.75 points, while Nasdaq 100 futures edged ~0.44% higher to 28,891.50. Dow Jones futures were also subdued at 52,336.0 points.

S&P 500 futures, Nasdaq 100 futures, and Dow Jones futures (Source: TradingView)

The cautious start followed a difficult week on Wall Street, where weakness in semiconductor and artificial intelligence-related stocks weighed heavily on the technology sector. The Nasdaq Composite declined 2.9% over the week, while the S&P 500 and Dow Jones Industrial Average fell 1.6% and 0.9%, respectively.

Investor confidence was also affected by the intensifying conflict involving the United States and Iran. Continued military strikes and attacks near important regional shipping routes have raised concerns about global energy supplies, particularly the movement of oil through the Strait of Hormuz.

These concerns pushed Brent crude above US$90 per barrel in Asian trading, while West Texas Intermediate rose close to US$83.5. Sustained strength in oil prices could add to global inflationary pressures and make it more difficult for the U.S. Federal Reserve to lower interest rates.

WTI and Brent Crude Oil Futures (Source: TradingView)

Attention will now shift towards a busy corporate reporting calendar. Alphabet, Tesla, General Motors, Intel and Texas Instruments are among the major companies scheduled to release quarterly results. Investors will closely examine their outlooks for artificial intelligence investment, cloud computing demand, semiconductor spending and broader corporate activity.

For Australian investors, developments in the United States and the Middle East could influence local market sentiment. Elevated oil prices may provide support to ASX-listed energy producers, while higher inflation expectations and reduced hopes for U.S. interest-rate cuts could pressure technology companies and other growth-oriented stocks. Australian mining and resource shares may also experience increased volatility as investors respond to changes in commodity prices and global risk appetite.

Overall, markets may remain cautious as investors balance geopolitical uncertainty, rising energy prices and potentially market-moving corporate results.

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