Wall St futures subdued as U.S.-Iran talks stall

By Ragini Mathur and Utkarsh Hathi

May 11 (Reuters) – Wall Street futures were subdued on Monday, taking a breather after a record rally last week, as investors fretted over signs of stalled talks between the United States and Iran that pushed oil prices higher.

U.S. President Donald Trump’s swift rejection of Iran’s response to a U.S. peace proposal stoked worries that the 10-week-old conflict could drag on and keep shipping through the Strait of Hormuz paralyzed. That sent crude prices up almost 3%. [O/R]

“Although the oil price is higher, there is no sign of panic in the market,” said Kathleen Brooks, research director at XTB.

“Wrangling over the details of a path to a peaceful resolution is to be expected. This is all part of a negotiation.”

U.S. stocks touched fresh peaks last week, with the S&P 500 and the Nasdaq both closing at record highs on Friday, buoyed by upbeat corporate earnings, a solid monthly payrolls report and expectations of a swift resolution to the Middle East conflict.

At 07:18 a.m. ET, Dow E-minis were down 56 points, or 0.11%, and S&P 500 E-minis were down 4 points, or 0.05%. Nasdaq 100 E-minis were up 13.25 points, or 0.05%.

Investors will now look to Tuesday’s consumer price index data, which is expected to show inflation ticked higher in April as the Middle East conflict puts upward pressure on energy prices. 

While the U.S. is a net oil exporter, concerns about the war’s impact on consumer demand and companies still linger. Producer prices and monthly retail sales figures are also due later in the week.

Also on the radar is a meeting between Trump and Chinese President Xi Jinping later this week, when the two leaders are set to discuss Iran, Taiwan, artificial intelligence and nuclear weapons, while also weighing an extension of a critical minerals deal.

The first-quarter reporting season will soon start winding down after a much stronger-than-expected performance from companies, particularly in the technology sector, helped push stocks to new highs.

Major names this week include tech networking giant Cisco and semiconductor equipment maker Applied Materials, while heavyweight names Nvidia and Walmart are due to report later in the month.

Intel climbed 5.6% in premarket trading after surging 14% on Friday on a report of a preliminary chip-making agreement with Apple. 

Among other movers, some airline stocks slipped as rising oil prices threatened to squeeze margins. Southwest Airlines, Delta Air Lines and United Airlines fell between 0.9% and 1.6%.

U.S.-listed shares of gold miners slipped as bullion prices declined 1%. Newmont, Sibanye Stillwater, and Harmony Gold shed between 1.6% to 1.7%.

(Reporting by Ragini Mathur and Utkarsh Hathi in Bengaluru; Editing by Devika Syamnath)