Stock futures slipped Friday, continuing the week’s downward momentum as oil prices surged amid geopolitical tensions. Investors awaited crucial U.S. jobs data that could influence market direction in the near term.
Futures linked to the Dow Jones Industrial Average dropped by 220 points, translating to a 0.5% decline. Similarly, S&P 500 futures fell by 0.5%, and Nasdaq 100 futures decreased 0.6%, reflecting broad market pressure.
West Texas Intermediate (WTI) crude oil futures climbed above $86 per barrel, reaching their highest point since April. Brent crude oil prices surpassed $89 per barrel, levels not seen in nearly two years, driven by concerns over potential disruptions due to ongoing U.S.-Iran conflict risks.
Qatar’s energy minister alerted markets to the possibility of Gulf producers declaring force majeure soon, potentially halting production. This scenario could escalate oil prices toward $150 per barrel, significantly tightening global energy supply.
The surge in oil prices contributed to declining stock prices throughout Thursday’s trading session. The Dow shed nearly 785 points, equivalent to a 1.6% loss, marking its second consecutive weekly drop and its steepest weekly decline since last October. Meanwhile, the S&P 500 slipped about 0.6%, and the Nasdaq Composite dipped roughly 0.3%.
Angelo Kourkafas, senior global investment strategist at Edward Jones, stated that “markets remain in risk-off mode,” highlighting worries about the conflict’s duration and energy supply disruptions. He noted that higher oil prices intensify inflation concerns, which may dampen consumer spending.
Despite short-term risks, Kourkafas emphasized structural changes have lessened the U.S. economy’s sensitivity to oil shocks. “Oil prices would need to stay above $100 for an extended period to slow economic growth significantly,” he explained, pointing to the U.S. status as a net oil exporter since 2019 and reduced energy intensity.
Market participants are focused on the upcoming release of the February nonfarm payrolls report, scheduled for 8:30 a.m. ET. Economists surveyed anticipate an increase of 50,000 jobs compared to the 130,000 gains recorded in January. The unemployment rate is expected to remain steady at 4.3%.
For the week so far, the S&P 500 is on track to decline about 0.7%, while the Dow Jones Industrial Average has dropped 2.1%. The Nasdaq, driven by technology stocks, has outperformed with an approximate 0.4% gain.
Investors remain cautious as they digest geopolitical developments and await economic data that could steer policy decisions and influence market trends in the coming weeks.
