Dow Jones Futures Slip as US Treasury Commits to Buybacks, Middle East Tensions Persist

US stock futures were under pressure during European hours on Monday, with Dow Jones futures holding near 53,350. As of press time, S&P 500 futures were down 0.17% trading near 7,680, while Nasdaq 100 futures fell 0.65% trading around 29,200. Market sentiment was influenced by a mix of factors, including ongoing geopolitical tensions in the Middle East and the US Treasury's commitment to buy back government bonds.

**Middle East Situation and High Oil Prices Curb Risk Appetite**

Despite the previously extended US-Iran ceasefire agreement, signs of oil supply disruptions persist in the Strait of Hormuz, a critical passage for roughly one-fifth of global oil shipments. Market reports show that Brent crude futures, the global oil benchmark, have again broken above $100 per barrel, last rising 1.8% to $103.70 per barrel. Widespread concerns that sustained energy shocks could trigger a surge in inflationary pressures and weigh on global economic growth continue to suppress risk appetite in equity markets against this macro backdrop.

**Fiscal Buyback Commitments Intertwined with Debt Concerns**

US Treasury Secretary Bessent recently emphasized that the Treasury still has a substantial policy toolkit and revealed that the government could soon announce a policy direction placing greater emphasis on fiscal consolidation. However, Wall Street remains skeptical of the effectiveness of such measures, with some arguing that expanding buybacks amounts to a watered-down version of Operation Twist, unlikely to keep long-end yields low over the long term. According to the Wall Street Journal, despite the Treasury's plan to double the scale of longer-dated Treasury buybacks, bond yields continued to move higher on Thursday, and forex traders were not convinced either, with the dollar barely shaking off its recent sluggishness. Market analysis notes that total US government debt officially surpassed $40 trillion this week, prompting investors to demand higher term premiums to reflect uncertainty over future fiscal deficits and massive issuance needs, offsetting some of the positive signals from the buyback commitment.

**Corporate Earnings Season Provides Fundamental Support**

Despite macro headwinds, the US corporate earnings season has gotten off to a broadly solid start. According to Bloomberg data, nearly 80% of S&P 500 companies that have reported first-quarter results have beaten analyst expectations, providing some fundamental support to the market. However, individual stock performance has been clearly divergent, with some technology companies seeing their share prices come under pressure after announcing large future capital expenditure plans, reflecting stricter market scrutiny of long-term investment returns in the current environment.