Dow futures edged lower Thursday after a strong rally driven by a tentative two-week ceasefire between the United States and Iran, as uncertainty resurfaced over alleged violations involving Israel and Lebanon. Ongoing geopolitical tensions, disputes over the scope of the truce, and continued military activity have raised doubts about the agreement’s stability, even as negotiations are set to continue. Markets also weighed concerns about oil prices and potential inflationary pressures highlighted by the Federal Reserve, while recent gains in Wall Street indices and semiconductor stocks reflected cautious optimism about easing conflict.

As markets watched to see if a two-week ceasefire in the Iran war would hold amid some indications of strain in the tentative accord, U.S. stock index futures saw a modest premarket decline on Thursday. After a fantastic day on Wall Street, where the Dow recorded its greatest day in a year after Washington and Tehran indicated they had reached an agreement to halt hostilities for two weeks, futures fell. However, Iran claimed that Israel’s ongoing attacks on Lebanon violated the truce, making Lebanon’s involvement in it a topic of disagreement. Iranian officials are traveling to Islamabad tonight for “serious talks” with the United States, which are tentatively set for Saturday morning, despite ongoing Israeli activities in Lebanon.

U.S. President Donald Trump reiterated his demands that Iran stop its nuclear operations and reopen the Strait of Hormuz on Wednesday night, adding to the uncertainty surrounding the ceasefire by stating that U.S. military forces will remain around Iran until a “real agreement” was made. By 05:52, S&P 500 Futures had dropped 0.3% to 6,782.81 points. Dow Jones Futures down 0.4% to 47,909.9 points, while Nasdaq 100 Futures dropped 0.3% to 25,002.0 points. In a morning note, analyst Adam Crisafulli stated, “Since the [S&P 500] was struggling with 6900-7000 even before the war, that range is going to be even stronger resistance now.”

Although the United States and Iran first indicated that they were ready to a two-week ceasefire, Tehran accused the United States and Israel on Wednesday of breaking multiple provisions in its 10-point peace proposal. Israel’s ongoing attacks on Lebanon, which Iran said were covered by the ceasefire agreement, were a major breach. However, Israel declared it will keep striking Hezbollah fighters in Lebanon, while the White House indicated that Lebanon was not included in the deal. Iranian authorities stated that moving on with U.S. peace negotiations without include Lebanon in the agreement would be “unreasonable.”

Iran had previously indicated that it would permit safe passage through the Strait of Hormuz during the two-week ceasefire, but sources also revealed that Iran has closed the waterway in reaction to Israel’s attacks. Later this week, U.S. and Iranian officials are scheduled to start ceasefire negotiations in Pakistan; however, the primary agenda is still unknown. Washington’s demands that Tehran stop its nuclear enrichment programs and turn over all of its uranium have likewise been generally rejected by Tehran. After initially declining upon hearing of the truce, oil prices recovered some of their losses on Wednesday night.

Following the announcement of the truce, Wall Street indices saw significant increases on Wednesday as investors looked for an end to the almost six-week-long conflict in the Middle East. On its greatest day in a year, the Dow Jones Industrial Average increased 2.9% to 47,909.92 points, while the S&P 500 climbed 2.5% to 6,782.96 points. With technology stocks recovering some of their sharp losses from March, the NASDAQ Composite rose 2.8% to 22,635.0 points. The Philadelphia Semiconductor Index surged more than 6% due to advances in significant companies like Micron Technology, NVIDIA, and Intel. Chipmakers did better. Memory chip giant Samsung Electronics predicted impressive results in the first quarter, which gave chipmakers hope. In addition to the Iran war, markets interpreted relatively hawkish signals from the Federal Reserve’s March meeting minutes, which were made public on Wednesday. According to the minutes, policymakers are becoming more and more concerned about the oil price surge, which may lead to higher interest rates and inflation in the upcoming months.