U.S. Stock Futures Slide Friday on $104 Oil
Stock futures fell in the United States both Thursday and Friday as the Iran conflict news produced more uncertainty.
Quick overview
- The U.S. equity market continued to decline on Friday, with the Nasdaq down 0.6% and both the Dow and S&P 500 falling 0.4%.
- Rising oil prices, now over $100 a barrel, and ongoing Middle East conflict are contributing to investor fears and market instability.
- Leading tech stocks, including Nvidia and Apple, have struggled significantly, while a few smaller software stocks like Salesforce have shown resilience.
- Concerns about inflation and rising gas prices may further impact consumer spending and the overall economy.
On Friday, the U.S. equity market dipped further from the previous day’s drop and pushed the Nasdaq down 0.6%, while the Dow and S&P 500 both fell 0.4%.
Stocks decreased sharply on Thursday, with the Dow losing 470 points, and Friday kept the bearish trend going with a further drop. Both the S&P 500 and Nasdaq fell to their lowest closing points since September, and analysts point toward rising oil costs and ongoing Middle East conflict as the culprits.
Investors are scared to play the market at a time when inflation may be rising and oil prices are now more than $100 a barrel. Brent crude rose to $104 on Friday and West Texas intermediate climbed 2.4% to hit $96.75 per barrel.
Middle East Uncertainty Makes the Stock Market a Hard Sell
There are conflicting signals coming out of Washington this week. President Trump wrote on Truth Social that he would not be attacking energy plants in Iran for now. However, the Pentagon is reported as looking into sending 10,000 more troops into the area. This does not look like a deescalation but perhaps a change of course for the war that has now been going on for a month.
Consumers are worried about the price of gas and oil, which have been steadily rising since the conflict began. There have been days when the price fell briefly, but the overall cost of oil has climbed 45% since the fighting began.
Leading stock futures, particularly the Magnificent Seven stocks, were all looking bearish on Thursday at the closing bell. These stocks have struggled since the fighting started, with Nvidia (NVDA), Apple (AAPL), Alphabet (GOOGL), and Microsoft (MSFT) all taking a plunge in recent days. Nvidia lost 4.16% on Thursday and will likely fall further on Friday as selling pressure worsens. Investors are less likely to feel confident in the stock market when oil prices are high and the risk of inflation rising is elevated.
A few software stocks have held firm amid the bear trend. Salesforce (CRM) climbed 2% Thursday, and Snowflake (SNOW) added 1% while Figma (FIG) gained 5%. Investors are more worried about the bigger stocks that tend to be market movers rather than these somewhat smaller software equities that are less visible but perform steadily even during times of economic pressure. If the fighting continues long enough, even these may start to give way. So far, inflation has held mostly steady since the fighting in Iran started, but the constantly rising gas prices could increase the cost of other commodities in the weeks to come.
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