U.S. futures climbed early Thursday amid U.S.-Iran tensions, with equity markets appearing set to rebound even as fresh military strikes and a jump in oil prices unsettled the broader picture. Investors are weighing renewed conflict in the Middle East against ongoing strength in corporate earnings and the technology sector.

Futures Point Higher

The early moves showed cautious optimism across major U.S. index futures:

• S&P 500 futures rose 0.3%
• Dow Jones Industrial Average futures gained 81 points, or roughly 0.15%
• Nasdaq 100 futures advanced 0.61%

The rebound extended overseas. European stocks also recovered on Thursday, with the pan-European Stoxx 600 index up around 0.5% as most regional markets and sectors traded higher. France’s CAC 40 and Germany’s DAX each rose 0.6%, while London’s FTSE 100 slipped 0.2%. Tech stocks and miners led the gains, though healthcare and consumer staples lagged.

In Asia, the picture was mixed but largely positive. Japan’s Nikkei 225 closed 1.4% higher and South Korea’s Kospi rose 0.62% in choppy trade. Mainland China’s CSI 300 finished up 2.5%, while Hong Kong’s Hang Seng slipped 0.5% in its final hour.

The Iran Flashpoint

The market backdrop is dominated by escalating friction between Washington and Tehran. U.S. Central Command said Wednesday afternoon that the U.S. had launched fresh strikes on Iran in response to Tehran’s attacks on commercial shipping around the Strait of Hormuz. West Texas Intermediate crude futures were last up nearly 1%.

The tone had already darkened earlier in the day. President Donald Trump signaled he may no longer be interested in negotiating a deal with Iran, and before that declared the ceasefire between the two countries “over” following another wave of attacks in the region.

Analysts warned the disruption could linger. Mason Mendez, a global real assets analyst at Wells Fargo Investment Institute, cautioned that expectations of a quick return to normal Persian Gulf exports are being challenged. With global reserves and inventories already low, he suggested any further escalation would likely reinforce a higher geopolitical risk premium in oil prices, even once negotiations eventually resume.

Wednesday’s Session

The rebound in futures followed a rough regular session. The Dow dropped 576.76 points, or 1.1%, while the S&P 500 fell 0.28%, both weighed down by the spike in oil prices. The Nasdaq Composite bucked the trend, rising 0.2% thanks to gains in Nvidia and other chip stocks.

Looking ahead, Mendez noted that oil prices would likely stay top of mind heading into Thursday. While the renewed geopolitical risks could stoke near-term risk-off sentiment, he maintained that strong equity earnings momentum and continued AI strength should keep pushing the S&P 500 toward Wells Fargo’s year-end target range of 7,800 to 8,000.

What Traders Are Watching

Several data points and corporate updates are on the docket for Thursday. Traders will monitor the weekly jobless claims report at 8:30 a.m. ET and existing home sales at 10 a.m. PepsiCo is also set to report earnings before the opening bell.

A Sharp Drop for AstraZeneca

Not every corner of the market shared in the optimism. Shares of AstraZeneca tumbled Thursday morning after a late-stage clinical trial for a heart disease drug fell short of its target.

The medicine, Wainua, failed to meet its main goal of reducing deaths and recurrent heart-related emergencies over 140 weeks compared with a placebo, the British drugmaker said in an early press release. The stock was last down 8.8% in London, on pace for its worst day since March 2020 at the onset of the Covid-19 pandemic, while its NYSE-listed shares fell 8% in premarket trading. Shares of Ionis Pharmaceuticals, which is co-developing Wainua in the U.S., dropped 12.5% in premarket trading.