U.S. futures declined on Tuesday after Israel’s military issued an evacuation warning to people in Iran’s capital Tehran, the Associated Press reports. Futures for the S&P 500 and the Dow Jones Industrial Average were down 0.6%. U.S. President Donald Trump also announced he was returning from the G7 summit in Canada a day early due to the intensifying conflict.
Oil prices gained more than $1 per barrel after the warning for a part of the city of 9.5 million that houses Iran’s state TV and police headquarters and three large hospitals, including one owned by the country’s paramilitary Revolutionary Guard.
Later this week, the Federal Reserve is set to discuss whether to lower or raise interest rates, with the decision due on Wednesday. The nearly unanimous expectation among traders and economists is that the Fed will stand pat.
The Federal Reserve has hesitated to lower interest rates after one cut late last year. It is waiting to see how much Trump’s tariffs will hurt the economy and raise inflation, which has remained tame recently, and is near the Fed’s 2% target.
More important for financial markets are forecasts for where Fed officials see the economy and interest rates heading in upcoming years.
