US equity futures pointed lower Thursday morning, with S&P 500 contracts slipping 0.2% and Nasdaq 100 futures falling 1%, as renewed American military strikes on targets in Iran compounded a broad selloff in semiconductor stocks following Taiwan Semiconductor's earnings-driven capex shock. The dual pressure from geopolitical escalation and chip sector profit-taking created a risk-off tone across most asset classes in pre-market trading, even as positive economic data and a healthcare sector beat on earnings provided partial offsets.
The United States intensified its strikes on Iran early Thursday, hitting targets farther north than in previous rounds and also firing on a vessel the government identified as engaged in activity linked to Iran's military operations in the region. The strikes came despite ongoing diplomatic discussions centered on the memorandum of understanding signed in Burgenstock, Switzerland in late June, highlighting the gap between the framework's stated goals and conditions on the ground. Analysts said markets appear to believe neither side wants a broader regional conflict, but the continuation of military action maintained a meaningful geopolitical risk premium in energy prices.
Oil prices retreated modestly from Wednesday's close but remained sharply higher for the week, given the persistent disruption to shipping and the uncertainty surrounding Iranian crude exports. Gasoline station retail sales fell 5.3% in June's retail sales report, reflecting the price impact on consumer behavior, but WTI crude held well above pre-conflict levels as traders balanced the diplomatic progress against the ongoing military tempo. Shipping insurers and tanker operators continued to price elevated risk premiums for Strait of Hormuz transits, limiting the pace of any supply normalization even if a formal peace agreement advances.
The chip sector was the dominant driver of the broader market weakness. TSMC's US-listed shares fell 4.6% in premarket trading despite a revenue and earnings beat, as investors focused on the company's decision to raise 2026 capital expenditure guidance to $60 billion to $64 billion, a revision that sparked concerns about near-term free cash flow pressure and the sustainability of current valuations across the AI semiconductor supply chain. The VanEck Semiconductor ETF slid 2.2% globally, with Arm Holdings falling roughly 4%, and SK Hynix plunging 11% in Seoul — the latter's decline pulling the South Korean KOSPI down 6.2%, its sharpest session decline in several months.
The broad cross-asset picture heading into Thursday's session was accordingly mixed. Treasury yields edged higher as the Philadelphia Fed's manufacturing blowout of 41.4 — far above the consensus estimate of 13 — complicated the narrative of smooth disinflation that CPI and PPI data had established earlier in the week. The dollar firmed slightly. Gold held near recent highs. Oil's geopolitical premium persisted. And healthcare stocks, anchored by UnitedHealth's better-than-expected results, provided a notable counterweight to chip and tech weakness in futures markets.
Strategists said Thursday's session is shaping up as one defined by sector rotation rather than broad directional conviction. Investors who have been overweight semiconductors face a session of pressure, while defensive healthcare and select consumer names benefited from the UNH read-through. The Dow Jones futures added 17 points, or 0.02%, roughly reflecting the index-level arithmetic of a strongly rising UNH counterbalancing chip and tech weakness in the broader industrial average. Attention will turn to Netflix's after-hours earnings print as the final major binary catalyst of the week.