Dow Futures indicate a downward trajectory, as uncertainty looms regarding further discussions between the U.S. and Iran, notwithstanding President Donald Trump’s recent decision to prolong a ceasefire. Oil prices hover above $100 a barrel once more, as investors assess the persistent supply disruptions in the Strait of Hormuz. Shares decline slightly in after-hours trading, as the company’s stronger-than-expected earnings are eclipsed by its spending plans for 2026.

Dow futures declined on Thursday, influenced by persistent tensions in the Middle East, notwithstanding Trump’s announcement regarding a ceasefire extension with Iran. Analysts have indicated that the influence of the continuous developments in the Iran war might be diminishing, as investors appear to be shifting their attention towards a series of corporate earnings reports and a sustained surge in investment in artificial intelligence infrastructure. By 03:32, the index had decreased by 277 points, or 0.6%, the other index had declined by 30 points, or 0.4%, and the final index had fallen by 104 points, or 0.4%. The primary indices on Wall Street advanced on Wednesday, moving closer to new record highs. The extension of a U.S.-Iran ceasefire, just prior to its expiration, has generated a sense of relief, which is further supported by robust corporate earnings despite challenges posed by the ongoing conflict. Data indicates that nearly 80% of firms within the S&P 500 that have reported first-quarter earnings have exceeded analysts’ expectations. “The primary concern for risk assets remains the trajectory we are following, which appears to be steering towards a resolution of the conflict,” noted Michael Brown in a recent communication. “Both parties are currently in pursuit of a ‘off ramp’ to reduce tensions, with public statements from each side primarily focused on enhancing their negotiating positions rather than escalating military actions.” As long as that continues to be the trajectory, risk appetite is expected to stay supported.

Market participants were actively seeking indications that new peace discussions might arise between the U.S. and Iran, following Trump’s remarks to U.S. media suggesting that renewed negotiations are “possible” as early as Friday. On Tuesday, the president announced via social media that a ceasefire agreement with Iran has been prolonged at the behest of Pakistan, which has acted as a mediator between Washington and Tehran. Trump stated that the truce would remain in effect “until such time as” Iranian officials provide a “unified proposal” for peace. Nonetheless, the prospects for any forthcoming negotiations were clouded by ambiguity, especially following Iran’s assault on three vessels—two of which were captured—close to the Strait of Hormuz mere hours after Trump’s declaration, as a reaction to the persistent American blockade of Iranian harbors.

The potential for additional supply disruptions in the strait, an essential shipping route accounting for one-fifth of global oil, has led prices to rise above $100 per barrel once again. The reassuring element is that at least one party – the U.S. – is signaling a strong desire to resume negotiations swiftly. Analysts noted that the lack of clarity surrounding plans for reopening the Strait of Hormuz is less reassuring. They noted that as expectations for a resolution in the conflict diminish, “the reality of supply disruption will set in, leaving further upside for prices.” In the absence of any progress, the market is likely to become “increasingly numb to the noise and headlines that have dictated price action recently,” they flagged. Despite a retreat from the initial surge following the onset of the war in late February, oil prices remain significantly elevated compared to pre-conflict benchmarks. Concerns have proliferated that the repercussions of the energy shock may lead to an increase in inflationary pressures and a deceleration in global growth.

Tesla reported a quarterly performance that exceeded expectations on both revenue and earnings, with its primary automotive segment performing more robustly than anticipated during the period. However, the company’s shares experienced a reversal in aftermarket trading following the announcement of plans to allocate over $25 billion this year to support a pivot towards robotics and autonomous driving. In January, Tesla projected annual capital expenditures to reach $20 billion. Tesla shares were last down by 1.8% after-hours, reversing course from an over 4% gain. Meanwhile, CEO Elon Musk moderated some enthusiasm regarding Tesla’s strategic realignment. During a post-earnings call, Musk addressed inquiries regarding Tesla’s output rate for its Optimus robot in 2026, acknowledging challenges in shifting the production lines from the recently discontinued Model S/X to robot manufacturing. Optimus represents an entirely novel product accompanied by a wholly distinct production line. “It is simply impossible to predict,” Musk stated, noting that production is expected to be “quite slow at first.” He also highlighted a “cautious approach” regarding Tesla’s unsupervised autonomous driving and robotaxi initiatives, cautioning that revenue from these ventures will “not be super material” this year. On Thursday, the earnings schedule prior to the market opening will feature American Express, a key player in the credit-card sector, alongside aerospace giant Lockheed Martin. Meanwhile, chip manufacturer Intel is set to release its financial results after the U.S. markets close.

On the economic data front, a fresh examination of U.S. business activity in April may offer insights into how American companies are managing price pressures stemming from the Iran conflict. In March, the purchasing managers’ index, a key economic indicator, decreased to 50.3, a decline from 51.9 in the previous month. The latest data reflects the lowest performance observed since September 2023. In a statement at the time, S&P Global’s Chief Business Economist, Chris Williamson, indicated that the figures illustrated “the U.S. economy buckling under the strain of rising prices and intensifying uncertainty, as the war in the Middle East exacerbates existing concerns regarding other policy decisions in recent months, notably with respect to tariffs.”