Nasdaq, S&P 500 Futures Dip As Trump Sets Iran Deadline; Powell’s Patience Keeps July Rate Cut Bets Muted

Geopolitical tensions remained the dominant theme in the market on Friday, as U.S. index futures traded in negative territory overnight following the Juneteenth holiday. 

Traders assessed the White House’s announcement that President Donald Trump will decide whether to authorize military strikes against Iran within the next two weeks.

As of 9:56 p.m. ET, Nasdaq 100 futures were down 0.3%, S&P 500 futures slipped 0.4%, and Dow futures edged lower by 0.1%.

Israel extended its offensive on Iranian nuclear sites, with Prime Minister Benjamin Netanyahu warning that the campaign could destabilize Tehran’s leadership. 

He said Israel had destroyed more than half of Iran’s missile launchers, adding, “No one is immune.”

Meanwhile, the Iranian foreign minister is due to meet with his British, French and German counterparts in Geneva, where officials are expected to stress the potential for a diplomatic resolution. 

UK Prime Minister Keir Starmer called on Trump to keep the door open for talks.

Oil prices pared earlier gains but held firm. Brent crude crossed $78 a barrel before easing slightly, while West Texas Intermediate hovered near $74. 

Gold prices remained steady at nearly $3,370 an ounce and were on track for their first weekly decline in three, as investors rotated haven demand toward silver and platinum. 

The 10-year Treasury yield held below 4.4% late Thursday. The dollar index hovered near the 99 mark, with the greenback weaker against major peers.

Asian shares were mixed in early trading on Friday as traders remained cautious amid Middle East tensions. Japan’s Nikkei edged down about 0.1%, while Hong Kong’s Hang Seng was up roughly 0.6%

Initial U.S. jobless claims declined by 5,000 to 245,000 for the week ending June 14 — holding near eight‑month highs — while May housing starts plunged nearly 9.8% to a five‑year low of 1.256 million units, underscoring a cooling labor market and weakening construction activity.

The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) dipped 0.02% and 0.01%, respectively. 

The SPDR Dow Jones Industrial Average ETF (DIA) slipped 0.06%, while the iShares Russell 2000 ETF (IWM) rose 0.53%.

The U.S. Federal Reserve's Federal Open Market Committee (FOMC), led by Chair Jerome Powell, decided on Wednesday to keep benchmark interest rates unchanged at 4.25% to 4.50%. 

According to the Fed’s updated “dot plot” projections, officials expect to lower rates by 50 basis points in 2025, while the 2026 outlook was revised down to just 25 basis points of easing. 

The Fed last reduced rates by 25 basis points in December 2024.

Powell noted that goods inflation is expected to rise over the summer as Trump’s new tariffs affect consumers. He also advised caution in interpreting interest rate forecasts, stressing they remain subject to change depending on future inflation data.

Saxo Bank analysts said the Federal Reserve’s updated projections reflect a “stagflationary tilt,” with downgraded growth forecasts and higher expected inflation and unemployment through 2027. 

They noted that the FOMC's mixed tone, combined with Powell’s emphasis on patience and uncertainty, kept expectations for a July rate cut in check.

The Saxo Strategy Team also pointed to rising geopolitical risk, citing concerns that President Trump may direct U.S. military assets, including the Nimitz carrier group, toward Iran. 

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