rewrite this title and make it good for SEOUS futures pare losses as Trump weighs Iran role

US equity futures moderated declines as President Donald Trump weighs whether to back Israel militarily in its conflict with Iran.

Contracts for the S&P 500 were down around 0.3% from Wednesday’s close in early Asia hours, compared with a 0.9% drop on Thursday when US markets were closed for the Juneteenth holiday. Shares in Japan and Australia held to tight ranges.

While traders were offered some short-term clarity as the White House said Trump will decide within two weeks whether to strike Iran, the remarks did little to resolve broader uncertainty around potential US involvement and the risk of renewed energy-driven inflation.

“If the US does strike, you’re going to see a big knee-jerk reaction,” said Neil Wilson, investor strategist at Saxo UK. “No one will be wanting to make big long bets.”

Brent crude fell around 2% Friday to moderate gains from earlier in the week. Treasuries were steady while the dollar weakened. The yen strengthened to around 145 per dollar.

Traders’ sentiment turned more cautious following a Bloomberg report that senior US officials are preparing for a possible strike on Iran in the coming days. Markets were already on edge after the Federal Reserve downgraded its estimates for growth this year and projected higher inflation.Israel struck more of Iran’s nuclear sites on Thursday and warned its attacks could bring down Tehran’s leadership as both sides awaited a decision from Trump on whether to join the offensive.Some extreme scenarios resulting from increased US involvement in the Israel-Iran war could push oil prices as high as $130 to $150 a barrel, particularly if Iran retaliates in a major way, said Jennifer McKeown, chief global economist at Capital Economics Ltd. Such a development would pause further policy easing by central banks, she said.

“Even though central banks would like to think that would be a temporary impact, I think it would be a brave central bank that would cut interest rates,” McKeown said on Bloomberg TV.

Brent futures have been pricing in a geopolitical premium of about $8 a barrel since Israel and Iran began attacking each other last week, according to a survey of analysts and traders. US intervention in the conflict would bolster that further, but exactly how much would depend on the nature of the involvement, the nine respondents said.

In Thailand, the political fate of Prime Minister Paetongtarn Shinawatra remained uncertain after mounting opposition calls and street protests for her to resign following a leaked phone call in which she criticized her army.

Elsewhere in Asia, data set for release Friday include 1-year and 5-year Loan Prime Rates in China, inflation in Japan, and foreign exchange reserves in India. Markets are closed in New Zealand. Japan’s Finance Ministry will seek feedback from market players later Friday over its planned reductions to super-long bond issuance as it takes steps to quell market turbulence.