Stock futures in the US declined on Thursday, with investors turning cautious amid rising geopolitical tensions and growing ambiguity around the Federal Reserve’s interest rate outlook. Trading volumes were light, with American cash markets shut for the Juneteenth holiday.

As of early Thursday, futures tied to the S&P 500 and Dow Jones Industrial Average were down 0.4.percent, while Nasdaq-100 futures slipped 0.6.percent, reflecting a risk-off mood among global investors.

Middle East risks keep oil traders on edge

The pullback in sentiment follows renewed concerns over the escalating conflict in the Middle East. Reports indicate that Israel recently struck Iranian nuclear facilities and high-level leadership targets, fuelling fears of a broader regional conflict. Markets are watching closely to see whether the crisis intensifies and potentially disrupts global oil supplies.

In energy markets, Brent crude futures edged up 0.4 percent in early trade, nearing $77 per barrel. The contract has already risen more than 23 percent so far this month, driven by both geopolitical risk and tightening supply expectations.

Fed stance adds to market caution

Meanwhile, the U.S. Federal Reserve's latest policy decision has left investors parsing mixed signals. As expected, the central bank held interest rates steady. But updated projections—known as the "dot plot"—revealed a split among policymakers. While a narrow majority still sees two rate cuts by the end of the year, more members are now anticipating none at all, citing persistent inflation risks and the uncertain economic fallout of Trump's proposed tariffs.

This cautious tone from the Fed stands in contrast to recent moves in other parts of the world. On Thursday, Switzerland’s central bank cut rates to zero, and investors expect it could even move into negative territory again, given the pressure from a strong franc and softening inflation. Norway’s central bank also surprised markets with a 25-basis-point cut, while the Bank of England left rates unchanged, in line with expectations.

Earlier global market moves show fragile sentiment

In the previous session, global equities had already started to show signs of fragility. The Stoxx Europe 600 closed down about 0.4 percent, while Asia saw steeper declines — Hong Kong’s Hang Seng Index dropped 2 percent, and Japan’s Nikkei 225 slid 1 percent.

With the US markets on pause for the holiday and no major economic data scheduled, attention remains fixed on the Middle East situation and the global central bank response.