Futures Slide on Google Earnings, Oil Surges Above $90 as Houthis Strike Saudi Tankers

US equity futures slumped on Thursday as oil prices breached $90 a barrel following Houthi attacks on two Saudi oil tankers in the Red Sea, and Alphabet's underwhelming earnings dragged down the Magnificent Seven technology stocks, according to market reports.

WTI crude topped $90 a barrel while Brent crude approached $100, after Iran-aligned Houthi militants said they targeted two tankers, threatening to open a new front in the conflict. The US military struck Iranian military targets including maritime capabilities, missile and drone storage facilities, coastal surveillance sites, and air defense assets, according to Central Command. At least nine ships halted passage through the Bab al-Mandeb strait, as reported by ZeroHedge. The US military also used a B-1 long-range bomber to strike Islamic Revolutionary Guard Corps targets in Iran, the first such mission since fighting resumed 12 days ago.

Alphabet shares fell nearly 4% in pre-market trading after the company reported results that weighed on the broader tech sector. All seven Magnificent Seven stocks were lower, with Tesla, Texas Instruments, and IBM also declining following earnings. However, semiconductor and memory stocks were bid higher, as Alphabet's capital spending plans boosted the AI theme.

European stocks declined, with the Stoxx 600 falling 0.6%. STMicroelectronics slid 17% after disappointing with its sales outlook, and Nestle posted its largest intraday drop since 2020, according to ZeroHedge.

The European Central Bank left interest rates unchanged at 2.25%, as widely expected, buying time to assess the impact of renewed Middle East hostilities. Some analysts had anticipated a rate hike, according to Benzinga.

Asian shares rose on Thursday, with the MSCI Asia Pacific Index climbing as much as 1.4%, led by Samsung and SK Hynix, as investors prioritized AI enthusiasm over geopolitical tensions. A Bloomberg gauge of Asian chip shares advanced 1.7%, extending gains for a third session.

The market turmoil has since eased. Oil prices fell more than 4% on Monday, and Asian shares gained further, after the United States and Iran refrained from fighting while discussing a possible resumption of negotiations on an interim ceasefire deal, the Associated Press reported. Shares in Chinese memory chipmaker CXMT surged about 470%.

Over the weekend, President Trump declined to continue strikes on Iran, and the pause was reciprocated by Tehran, marking the first break in almost two weeks of exchanges. According to a Rabobank strategist writing on ZeroHedge, CENTCOM commander Admiral Brad Cooper reportedly advised against further strikes, arguing that Iran's ability to disrupt shipping in the Strait of Hormuz had been substantially degraded and that the aerial campaign had reached the limits of its effectiveness. The New York Times reported that General Dan Caine, Chairman of the Joint Chiefs of Staff, had cautioned the President that further escalation would dangerously deplete CENTCOM's stock of interceptor missiles. Trump denied the reports, telling the Wall Street Journal "we have far more [interceptors] than we need."

An Omani team of negotiators met with Iranian counterparts to discuss reopening the Strait of Hormuz, with Iranian foreign ministry spokesman Baqaei calling the talks "useful" but noting no change in the strait's status.

Despite the easing, underlying tensions remain. Houthi attacks on Saudi Aramco infrastructure at the critical port of Yanbu continued over the weekend, and a blockade of Saudi Red Sea ports was declared, threatening crude oil flows to Asia. Israel braced for escalation, reopening public bomb shelters in major cities, and Prime Minister Netanyahu said the war would continue until the Iranian regime fell or gave up its nuclear ambitions, according to the Rabobank strategist.

One strategist, writing on Macrobusiness, described the recent market volatility as "TACO time," suggesting a tactical opportunity based on the 10-year yield, oil prices, and stock movements.

The Federal Reserve, Bank of England, and Bank of Japan are all scheduled to meet this week, with none expected to raise rates but the inflationary impact of the conflict likely to feature in their deliberations. Q2 GDP readings for the United States and the Eurozone, along with Q2 PCE for the former and July CPI for the latter, are also due.