Latest Iran conflict update: US futures rise on reports of secret Iran contacts

Investing.com - The Middle East conflict escalated on Wednesday, with the U.S. continuing its offensive against Iran, and Israel bombing locations related to Tehran’s missile and air defense systems. However, after media reports suggested secret discussions for a ceasefire, Wall Street stock index futures rose.

Tehran has retaliated against sites within Israel and U.S. bases and embassies across the Middle East. Iran also pledged to select a new Supreme Leader to succeed Ayatollah Ali Khamenei, who was killed in the weekend airstrike.

Concerns then grew that the conflict could last longer than the four to five weeks initially expected by President Donald Trump. A senior U.S. military official stated that U.S. forces are conducting round-the-clock strikes against Iran “from the seabed to space and cyberspace,” and added that more assets will be deployed.

According to a video briefing cited by Reuters, U.S. Commander Brad Cooper said that ongoing attacks have weakened Iran’s air defense systems and left no operational ships in key waterways.

Israeli Defense Minister Yisrael Katz also warned that any new leader appointed by Iran could become a “clear target for elimination.”

A prolonged crisis could cut off a significant portion of global oil and natural gas supplies, pushing prices higher and reigniting inflation pressures.

U.S. Futures Erase Losses

The possibility of prices rebounding—and the Federal Reserve delaying rate cuts this year—triggered sharp volatility in U.S. stocks on Tuesday.

A key concern for markets is that Middle East violence could lead to long-term disruptions of oil tanker traffic through the Strait of Hormuz, a vital waterway through which most of the world’s oil and natural gas supplies pass.

Before the attack on Iran, Brent crude traded at about $73 per barrel; it then surged significantly. The latest Brent futures price is $83.48 per barrel, up 1.6%, while U.S. WTI crude futures rose 0.9% to $75.26 per barrel.

Earlier Tuesday, oil prices jumped as much as 8%, but after President Trump hinted that the U.S. might escort ships through the Strait of Hormuz, prices retraced most of the gains.

Meanwhile, natural gas prices—crucial for electricity, heating, and other sectors—spiked in Europe and Asia. Iran’s attack on Qatar’s natural gas facilities has halted gas exports from this major producer, limiting supplies for several dependent countries.

Concerns over rising energy costs hit Asian stock markets hard. Countries like South Korea and Japan, heavily reliant on imports of oil and natural gas through the Strait of Hormuz, face risks of reduced shipping activity through this narrow southern Iranian passage. The South Korean Kospi index fell so sharply on Wednesday that trading was temporarily halted.

However, after The New York Times reported that Iran proposed conditions to end the conflict, Wall Street futures turned higher on Wednesday, and oil prices also eased. The paper cited officials familiar with the contacts, indicating skepticism among U.S. officials about whether Trump’s administration or Iran is ready for such an exit plan.

According to The New York Times, Israeli officials are eager to inflict maximum damage on Iran’s military machine and possibly overthrow the Tehran government, and have told the U.S. to ignore these contacts.

Publicly, Iranian leaders have not taken any steps to negotiate with Washington.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.