Wall Street poised for lower open as Middle East uncertainty caps rally

U.S. stock index futures pointed to a lower open on Tuesday as renewed doubts over easing Middle East tensions tempered the previous session’s relief rally despite President Donald Trump’s decision to delay strikes on Iran’s power grid. Trump postponed his decision, citing “productive talks” with Iranian officials on Monday, but Tehran has said no negotiations with the U.S. have taken place. Israeli officials said Trump wants a deal with Iran, but any talks were unlikely to be successful at this point. Investors took comfort from Trump’s comments, sending Wall Street’s main indexes rallying to more than 1% on Monday, in their biggest one-day rise since February 6. But the momentum lost steam as uncertainty over the conflict lingered. “It’s like whiplash. You kind of wake up every morning and wonder what it’s going to be next … Investors are still facing a pretty wide range of outcomes with this and a lot of it depends on time frame,” said Christopher O’Keefe, managing director and lead portfolio manager at Logan Capital Management. Meanwhile, concerns around private credit resurfaced after a report said Ares Management limited redemptions at 5% at its private credit fund, and so did Apollo Global Management on Monday, as withdrawal requests surged. Ares and Apollo shares fell 4.3% and 3.6%, respectively. The companies’ decisions mirror those of BlackRock and Morgan Stanley earlier this month. Peers Blackstone and Blue Owl Capital slipped about 2% each, while lost 3.1%. At 8:36 a.m. ET, Dow E-minis were down 198 points, or 0.43%, S&P 500 E-minis were down 26.25 points, or 0.4% and Nasdaq 100 E-minis were down 103.25 points, or 0.42%. The conflict in the Middle East has driven oil prices sharply higher, reviving inflation jitters and complicating the interest rate outlook for central banks. The U.S. Federal Reserve struck a hawkish tone last week, projecting only one reduction in 2026. Money markets are no longer pricing in any rate cuts this year, compared with two reductions expected before the Middle East conflict erupted. Expectations for hikes nudged higher amid escalating tensions last week, but were quickly unwound after Trump’s comments on Monday, according to CME’s FedWatch Tool. Last week, all three main U.S. indexes logged their fourth weekly decline, with the Nasdaq marking its biggest weekly drop since early February. On the data front on Tuesday, investors will watch a flash estimate of S&P Global’s gauge of business activity in March, alongside comments from Fed Governor Michael Barr. Among individual movers, shares of Jefferies gained 8.3% in premarket trading after the Financial Times reported that Japan’s Sumitomo Mitsui Financial Group is working on plans for a possible takeover of the investment bank. Shares of Smithfield Foods rose 5.9% as the U.S. pork processor beat analysts’ estimates for fourth-quarter sales and profit. Dexcom gained 2.2% as Evercore ISI upgraded its rating to “outperform” from “in line”. Barclays lifted its 2026 year-end target for the S&P 500 index on Tuesday to 7,650 from 7,400, citing stronger earnings expectations that outweigh macro risks like Middle East tensions, AI-driven disruption and stress in private credit.

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