Yesterday, equity indices closed lower. The S&P 500 fell by 0.04%, while the Nasdaq 100 declined by 0.04%. The Dow Jones Industrial Average lost 0.57%.

Oil prices jumped today to their highest level in nearly four years amid growing pessimism about efforts to resolve the Middle East conflict. Stocks plunged after earlier support from major tech earnings and following the Federal Reserve's decision on interest rates.

Brent crude rose by 7.1% to $126.41 per barrel before pulling back to about $125, extending its winning streak to nine days. Oil is up more than 100% year-to-date and is likely to extend its bullish run after Axios reported that President Donald Trump is to be briefed on new plans for potential military action in Iran.

Nasdaq 100 futures fell by about 0.3%, reversing a full 1.1% gain that followed strong results from large caps such as Alphabet Inc. and Amazon.com Inc. The MSCI Asia-Pacific equity index dropped by 1.5%, and European stocks are set to open roughly 1% lower.

Bonds dipped as the sharp rally in oil and the Fed's hawkish posture reduced demand for fixed-income assets. The 10-year Japanese government bond yield climbed to its highest level since 1997.

Traders are wrestling with a torrent of headlines, from a steep oil rally driven by the Iran war to a somewhat contradictory Fed stance that left interest rates unchanged to fight inflation, alongside blockbuster tech earnings. That mix is testing the resilience of the equity rally that had recouped Iran-related losses and pushed US markets to fresh record highs.

It is clear, however, that the combination of elevated oil, reports that the US is weighing military options in Iran, and negative news out of Europe is weighing on sentiment. On Thursday, traders will parse several major events: the European Central Bank and the Bank of England are set to announce their policy decisions, followed by economic data from the US. Both central banks are expected to keep rates unchanged.

As for the S&P 500 technical picture, the primary task for buyers today is to overcome the nearest resistance level of $7,125. That would help the index gain upside momentum and could pave the way for a surge to $7,138. Equally a priority for bulls is control above $7,156, which would strengthen buyers' positions. In the event of a downside move amid reduced risk appetite, buyers must defend around $7,106. A break below that level would likely push the instrument back to $7,087 and could open the way to $7,066.