Highlights

  • Dow Jones E-mini falls 135 points; Nasdaq 100 E-mini drops 192 points in Asian trade.
  • US-Iran talks in Geneva lift geopolitical risk and keep traders defensive.
  • ADP jobs data and NY Empire State Index seen as key for June Fed rate-cut bets.

US index futures moved lower during the Asian session on February 17, with the Dow Jones Industrial Average E-mini declining 135 points. The Nasdaq 100 E-mini slid 192 points, while the S&P 500 E-mini lost 30 points as cautious sentiment dominated. Thin volumes due to Chinese New Year holidays across parts of Asia amplified the downside move.

Lingering concerns around artificial intelligence disruption, elevated AI capital spending, and uncertain returns on investment continued to weigh on risk appetite.

Geneva Talks Put Geopolitics in Focus

Markets remained on edge as the US and Iran prepared to resume talks in Geneva. The possibility of failed negotiations and potential US military strikes on Iranian strategic sites raised fears of a broader regional conflict. Any escalation is likely to overshadow macro drivers and dictate intraday risk sentiment.

Labor Market Data and Manufacturing Activity in Spotlight

Later in the session, investors will track ADP employment data and the NY Empire State Manufacturing Index for fresh signals on the health of the US economy ahead of Q4 GDP.

  • Softer data → strengthens the case for a June Fed rate cut and supports risk assets.
  • Stronger data → could push rate-cut expectations further out and pressure equities.

Recent jobs and CPI releases have delivered mixed signals, leaving markets highly sensitive to incoming data and Federal Reserve commentary.

According to the CME Group FedWatch Tool, the probability of a March rate cut has dropped sharply, while June cut expectations have also edged lower, underscoring uncertainty around the policy path.

Medium-Term Outlook Supported by Rate-Cut Bets

Despite the pullback, expectations for multiple Fed rate cuts in the first half of 2026 continue to underpin a constructive medium-term view for US equity futures. Lower borrowing costs would support valuations and liquidity.

However, the bullish trajectory could be derailed by:

  • A US military strike on Iran.
  • A more hawkish-than-expected shift from the Bank of Japan, potentially triggering a yen carry-trade unwind.
  • Strong US data that pushes rate-cut expectations further out.

Key Macro Catalysts Ahead

Markets will closely monitor this week’s Personal Income and Outlays report, Q4 GDP, Services PMI, and speeches from FOMC members for direction.

In the near term, geopolitical headlines and incoming US data will drive price action. While the longer-term trend remains supported by anticipated Fed easing, any escalation in Middle East tensions or a hawkish policy surprise could challenge the outlook. If rate-cut expectations strengthen and geopolitical risks stabilize, US stock futures may resume their push toward fresh highs.