Stock Market Today: S&P 500, Dow Jones, Nasdaq 100 Futures Decline as Pentagon Prepares for Potential Military Strikes on Iran

U.S. stocks look set to open in the red on Thursday, with futures of the Dow Jones, S&P 500, and Nasdaq 100 indices falling, following Wednesday’s lower close.

On the economic data front, weekly initial jobless claims fell by 2,000 to a seasonally adjusted 197,000 for the week ending Oct. 3, pointing to continued resilience in the U.S. labor market. The print came in below expectations and pulled the four-week moving average down by 2,500 to 198,000.

Oil prices surged, with Brent futures hovering around $104 per barrel as geopolitical tensions in the Middle East intensified following reports that the Pentagon is preparing potential military strikes on Iran’s nuclear and energy targets. At the same time, a Marshall Islands-flagged tanker was spotted on fire in the Gulf of Oman.

Meanwhile, Tehran maintains its stance that the critical Strait of Hormuz will not reopen under economic pressure, adding to supply disruption fears.

Minutes from the September FOMC meeting showed most Federal Reserve officials leaning toward another rate hike before year-end to combat persistent inflation pressures driven by energy costs, tariffs, and AI spending. However, markets are largely discounting an October move, pricing in over an 80% chance that the Fed holds rates steady at its next meeting.

Meanwhile, the 10-year Treasury bond yielded 5.32%, and the 2-year Treasury bond yielded 4.79%, at the last check. The CME Group’s FedWatch tool projections show markets pricing in a 21.6% likelihood of the Fed hiking interest rates after its October meeting.

The SPDR S&P 500 ETF Trust (NYSE: SPY) and Invesco QQQ Trust ETF (NASDAQ: QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket trading on Thursday. The SPY fell by 0.36% at $774.40, while the QQQ declined 0.57% to $753.41.