US Futures Mixed; Dollar Down, Oil Up on Geopolitical Tensions

Lead US equity futures are mixed in pre-market trading, with Nasdaq futures up 0.25% and Dow futures down 0.16%. The US Dollar Index is down 0.37%, while WTI crude is up 0.28% following a drone strike near the Strait of Hormuz. Traders are paring bets on multiple Fed rate hikes by mid-2027. Session narrative US equity futures are showing mixed performance ahead of the market open. Nasdaq futures are leading gains, up 0.25%, while S&P futures are up 0.08%. Dow futures are trading lower by 0.16%. The Russell 2000 futures are nearly flat, up 0.02%. In the fixed income market, the US 10-year yield is down 0.22% to 4.63%. The US Dollar Index is weaker, down 0.37%, with EUR/USD up 0.35% and USD/JPY down 0.38%. GBP/USD is also stronger, up 0.40%. In commodities, WTI crude is up 0.28% to $81.48, and Brent crude is up 0.16%. Natural gas is showing a significant gain of 1.36%. Gold is up 0.29%, while copper is down 0.21%. Geopolitical developments are in focus, with reports of an IRGC drone strike on an oil tanker near the Strait of Hormuz. The Pentagon also announced deals with Boeing and RTX to boost missile component production. US Treasury Secretary Bessent stated the US plans to impose 'unprecedented economic isolation' on Iran. On the monetary policy front, traders are paring wagers on more than one Fed rate hike by mid-2027, indicating a shift in expectations for future tightening. Cross-asset check Equity ETFs are showing gains, with the S&P 500 ETF up 0.81% and the Nasdaq 100 ETF up 1.46%. The Dow ETF is up 0.14%. The VIX is down 0.82%. In rates, long-duration Treasuries are up 0.21%. In FX, EUR/USD is at 1.1571, USD/JPY is at 158.897, and GBP/USD is at 1.3541. In commodities, gold is trading at $4433, silver at $65.13, and natural gas at $2.76. Themes & continuing stories Geopolitical tensions in the Middle East continue to influence energy markets, with the drone strike near the Strait of Hormuz contributing to oil price movements. The US Treasury Secretary's comments on economic isolation for Iran add to the geopolitical narrative. Expectations for Federal Reserve monetary policy are evolving, with traders reducing bets on aggressive rate hikes. This shift could impact dollar strength and broader market sentiment. In the tech sector, NVIDIA has launched a new open-source Nemotron model, highlighting ongoing developments in AI. Macroeconomic data points, such as Taiwan raising its 2026 GDP growth forecast to 11.05%, provide regional economic insights. What’s ahead FOMC meeting minutes have been released, which will provide further details on the Federal Reserve's recent policy discussions. Market participants will be looking for clues regarding the future path of interest rates and the Fed's economic outlook. Continued monitoring of geopolitical developments, particularly in the Middle East, will remain crucial for energy markets. Further corporate earnings releases and analyst actions will also be watched for individual stock performance and sector trends.