BY COMFORT OGBONNA
U.S. stock index futures edged lower on Friday as escalating tensions in the Middle East stoked concerns about higher energy costs and their potential impact on inflation, while investors braced for a pivotal jobs report. The ongoing U.S.-Israel air campaign targeting Iran is entering its second week with no clear resolution in sight.
Oil prices surged this week at the fastest pace since Russia’s 2022 invasion of Ukraine, driven by disruptions in shipping through the strategically vital Strait of Hormuz. Natural gas producer Qatar warned that even if the conflict ended immediately, it could take “weeks to months” for delivery cycles to normalize, highlighting the fragility of energy supply chains.
In premarket trading, crude prices inched higher, pressuring airline stocks such as American Airlines and Delta, both of which fell roughly 1%. The S&P 500’s passenger airlines subindex is on track for a steep 9% weekly drop, reflecting investor concerns over rising fuel costs and operational disruptions.
Investor attention is also focused on the upcoming U.S. weekly jobs report, scheduled for 8:30 a.m. ET. Analysts are watching for signs that artificial intelligence integration across corporations could influence employment patterns, adding another layer of uncertainty to the labor market outlook.
Stronger-than-expected economic data this week, combined with the crude price spike, have pushed back market expectations for a 25-basis-point interest rate cut by the Federal Reserve. According to LSEG-compiled data, the rate reduction is now anticipated in October rather than July, signaling that policymakers may remain cautious amid inflation pressures.
At 5:14 a.m. ET, Dow E-minis were down 130 points, or 0.27%, S&P 500 E-minis fell 23 points, or 0.34%, and Nasdaq 100 E-minis declined 102.5 points, or 0.41%.
Artificial intelligence chip stocks also faced selling pressure, with Nvidia and Advanced Micro Devices each down about 0.7%, amid ongoing discussions by U.S. officials about a new regulatory framework for AI chip exports, though no final rules have been announced.
Despite the cautious market sentiment, U.S. equities outperformed their Asian and European counterparts this week, buoyed by a 1.5% rebound in technology stocks from February losses. The Nasdaq, heavily weighted toward tech, is on track for modest weekly gains. Marvell Technology surged 12% after projecting fiscal 2028 revenue above analysts’ estimates, underscoring strong demand for semiconductor products.
Energy stocks benefited from the market’s perception that the United States is better insulated from global energy shocks as a net oil exporter. Occidental Petroleum rose 2%, NextDecade climbed 2.3%, while natural gas ETFs such as BOIL and UNG gained 2.2% and 1%, respectively.
Meanwhile, other sectors faced headwinds. Retailer Gap fell 5.9% after warning about uncertainties related to U.S. import tariffs and forecasting annual adjusted profits below market expectations. Conversely, Oracle edged up 1% after reports indicated plans to cut thousands of jobs amid cash constraints linked to its expansive AI data center initiatives.
Overall, markets remain on edge as geopolitical tensions, rising energy prices, and economic data continue to influence investor behavior, highlighting the delicate balance between risk and opportunity in the current financial landscape.
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