U.S. futures declined as Iran tensions escalated and deal prospects dimmed, while mixed durable goods data added uncertainty, with investors closely watching upcoming inflation data and Federal Reserve signals.
The upward momentum seen over the past four trading sessions appears to have stalled on Tuesday, as traders nervously monitor developments on the Iran war front. After setting a Tuesday deadline for Iran last week, U.S. President Donald Trump signaled in a Truth Social post a short while ago that he may follow through on his threat.
At last check, the S&P 500 E-mini futures (ES) were down 0.34% and the Nasdaq 100 futures were down a steeper 0.52%.
Deal Prospects Bleak: Trump issued an ultimatum to Iran on Sunday to either strike a deal and reopen the Strait of Hormuz by Tuesday 8 p.m. ET or face the risk of its energy and power infrastructure being bombarded. Reiterating his threat, the president said Tuesday morning that “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.”
Iran, meanwhile, has asked its youth to form human chains around its key infrastructure.
The possibility of a deal now looks bleak as Iran rejected a ceasefire mediated by Pakistan and in turn submitted its own 10-point plan, which was reportedly rejected by the U.S.
Mixed Data: Traders also contended with mixed durable goods orders data that clouded the economic outlook further. A Census Bureau report released Tuesday showed durable goods orders fell 1.4% month-over-month in February, marking the fourth decline in five months. Economists had modeled a more modest 1% drop, following January’s 0.5% decline.
Durable Goods Orders (M-o-M Change)
Source: Census Bureau
Excluding transportation, durable goods orders climbed 0.8%, better than the 0.5% growth forecast. The metric, called core durable goods orders, had risen 0.3% in January.
Non-defense capital goods orders, excluding aircraft and parts, considered a proxy for capital spending, climbed 0.6%, following a 0.4% drop in January.
What Traders Watch Next: While also tracking headlines on the Iran war, traders may also sift through the New York Federal Reserve’s consumer expectations survey, which is due after the market opens. A couple of Fed speeches are also scheduled for the day.
The next big catalysts for this week would be the March consumer price inflation (CPI) report and the February personal consumption expenditure (PCE) index, which is released as part of the Bureau of Economic Analysis’ personal income and spending report.