Dow Futures are experiencing a slight decline, influenced by recent bombardments in the Middle East that have dampened expectations for a swift resolution to the conflict involving Iran. Key U.S. inflation data is set to be released, potentially providing insight into the effects of the conflict on price pressures in the world’s largest economy. Anthropic has released an updated version of its “Mythos-class” artificial intelligence model to the general public, incorporating new guardrails. In other developments, Oracle’s earnings report, scheduled for release after market hours, will serve as a critical examination of the ongoing AI boom.

Dow Futures indicated a downward trend on Wednesday, as investors assessed the implications of renewed U.S. military actions in Iran while bracing for the forthcoming release of crucial inflation statistics. By 02:24, the Dow futures contract had slipped by 81 points, or 0.2%, S&P 500 futures had dipped 22 points, or 0.3%, and Nasdaq 100 futures had declined 139 points, or 0.5%. The primary indices on Wall Street exhibited a mixed performance in the previous session, as the decline in technology stocks resumed following a temporary halt earlier this week, highlighting ongoing apprehensions regarding the sustainability of the artificial intelligence investment narrative. Shares of major semiconductor companies Nvidia, Micron, Intel, and Qualcomm all concluded the trading session with losses.

Meanwhile, the conflict in Iran and the simultaneous closure of the Strait of Hormuz persist in influencing market sentiment. On Wednesday morning, the United States executed new missile strikes against Iran, responding to an assault on an American helicopter in proximity to the strait. Blaming Iran for the attack, President Donald Trump stated that the U.S. “must, of necessity, respond.” Tehran has refrained from claiming responsibility for the strike, while issuing a warning that it will leave no bombardment “unanswered.” U.S. Central Command reported that military forces targeted Iranian air defences and satellite radar installations, though the extent of the damage remains unclear. Simultaneously, Israel continued its offensive in southern Lebanon, focusing on Iranian-supported Hezbollah militants.

These developments arise amidst a seemingly tenuous ceasefire in the Middle East, with ongoing aspirations for a peace agreement that would facilitate the reopening of the Strait of Hormuz. Some strategists have exhibited a relatively optimistic response to the recent wave of strikes, contending that it could be indicative of a trend of measured escalation and détente that has surfaced as both the U.S. and Iran pursue a viable exit strategy from the conflict. Brent crude futures, the global oil benchmark, fluctuated near the equilibrium point. Oil prices remain significantly elevated compared to pre-war levels, while the Strait of Hormuz, a crucial passage for approximately one-fifth of global oil supply, is effectively inaccessible to tanker traffic. In light of this context, markets will closely monitor U.S. consumer price data scheduled for release on Wednesday. Concerns have emerged that an inflation surge driven by energy prices may compel global central banks to increase interest rates as a countermeasure. A strong reading could strengthen expectations that the Federal Reserve, in particular, may increase rates before the end of the year. These expectations were already enhanced by a strong U.S. employment report released last Friday.

Anthropic released Claude Fable 5 on Tuesday, characterising it as a next-generation “Mythos-class” AI model that has been rendered safe for general use. The company first unveiled Mythos in April, but stated it could not release the AI system to the public due to its potential use as a sophisticated tool for hackers—a caution that elicited concern among corporate executives and the Trump administration alike. This newer, more restricted version of Mythos is regarded as safer for broader application, according to Anthropic. Importantly, the release incorporates mechanisms that reroute specific enquiries — such as those related to bioweapons or software vulnerabilities — to Anthropic’s previous Claude Opus 4.8 model. Fable 5 exhibits exceptional performance across nearly all evaluated benchmarks of AI capability, according to Anthropic. The model has demonstrated robust capabilities in software engineering, knowledge work, vision, scientific research, and various other domains.

Oracle will attract attention as it is set to report its quarterly earnings following the market’s close on Wednesday. The returns could provide a new perspective on the unchecked optimism surrounding AI. Analysts have highlighted ongoing concerns regarding the surge associated with the emerging technology, particularly following disappointing quarterly earnings from chip leader Broadcom last week. An equity raise from search titan Google has also exacerbated jitters, with traders beginning to wonder if companies — including tech names that are among the biggest businesses in the world — can finance the surge in data center construction needed to power cutting-edge AI models. For Oracle, “[w]hile we believe a higher capex guide could limit upside coming away from the [fiscal fourth-quarter] print, we continue to believe that the risk/reward skews positively,” analysts noted. In our assessment, presenting ‘clean’ fiscal fourth-quarter results, reaffirming revenue growth into FY27/FY28, and offering clarity regarding the previously announced equity raise could potentially act as a catalyst for the shares as we approach the summer months.