US Futures Recover as Palantir Earnings Beat and Middle East Tensions Persist
Palantir Technologies reports strong Q1 results, while US naval forces navigate the Strait of Hormuz amid escalating hostilities
US stock futures edged higher on Tuesday, reversing a broad sell-off triggered by escalating military tensions in the Middle East. The recovery saw the S&P 500 futures rise 0.3%, the Nasdaq-100 futures gain roughly 0.6%, and the Dow Jones Industrial Average futures increase 0.2%. Market sentiment stabilised despite reports that ships in the Strait of Hormuz were struck by missiles and that US forces engaged Iranian vessels.
Corporate news provided a significant counterweight to the geopolitical uncertainty. Palantir Technologies reported first-quarter revenue and profit that exceeded analyst estimates, driven by surging sales to commercial clients and the US government sector. The software firm posted revenue of $1.63 billion, an 85% increase year-on-year, with the majority of that figure, or $1.28 billion, originating from the US market alone.
Despite the earnings beat, Palantir shares slid almost 3% in premarket trading as investors scrutinised the report and adjusted their outlooks. CEO Alex Karp addressed the market during the earnings call, stating that the company built platforms that work despite global skepticism regarding software value and AI impacts. The company's performance highlighted resilient demand even as questions persist about the impact of artificial intelligence tools on its business model.
The broader market faced headwinds from energy prices reacting to the fresh round of hostilities. An oil terminal in Fujairah, UAE, was hit during the conflict, contributing to a dip in crude prices. West Texas Intermediate futures fell almost 3% to around $103 per barrel, while Brent crude futures dropped 2% to trade above $112 a barrel. President Donald Trump commented that the conflict may last another two to three weeks, adding to the uncertainty surrounding the fragile ceasefire framework.
US destroyers, including the USS Truxtun and the USS Mason, transited the Strait of Hormuz supported by Apache helicopters and other aircraft. The vessels faced a series of coordinated threats during the passage as the US sought to clear a path for stranded ships. While US officials indicated that American forces had engaged Iranian vessels, Iranian state media disputed those claims, underscoring the diplomatic friction in the region.
Looking ahead, several major companies, including Shopify, Pfizer, and Advanced Micro Devices, are scheduled to report earnings on Tuesday. Investors will also receive fresh figures on the US trade balance and the Job Openings and Labor Turnover Survey, both of which could provide further insight into the strength of the economy. Meanwhile, reports suggest Apple is holding exploratory discussions with Intel and Samsung Electronics to produce main processors for its devices, seeking a secondary option beyond TSMC due to concerns over reliability and scale.
