U.S. stock index futures suggest a weaker opening for Wall Street on Thursday, with markets expected to pull back after the major benchmarks finished the previous session mostly higher.
Rising energy costs are likely to weigh on investor sentiment, as crude oil prices resumed their upward surge after closing only slightly higher on Wednesday.
Oil’s renewed rally reflects persistent concerns about supply disruptions as the conflict in the Middle East continues to intensify.
Iran has reportedly struck a U.S. oil tanker in the northern Persian Gulf, heightening fears that the situation could escalate further after the country warned it may block maritime traffic through the strategically important Strait of Hormuz.
U.S. Defense Secretary Pete Hegseth also suggested that the conflict may last longer than initially anticipated by the Trump administration, indicating the war could continue for as long as eight weeks, although it may conclude earlier.
Despite the geopolitical tensions, overall market activity may remain somewhat cautious as investors wait for the U.S. Labor Department’s closely watched monthly employment report scheduled for release on Friday.
Economists currently forecast that the U.S. economy added about 60,000 jobs in February, following an increase of 130,000 in January. The unemployment rate is expected to edge up slightly to 4.4% from 4.3%.
Ahead of the employment report, the Labor Department released new data showing that initial jobless claims in the United States remained unchanged in the week ending February 28.
U.S. equities mostly advanced during Wednesday’s trading session, partially recovering from the losses recorded on Tuesday. The major indexes all ended the day higher, with technology stocks leading the gains.
Although the indexes finished below their intraday highs, they still posted solid gains. The Nasdaq climbed 290.79 points, or 1.3%, to close at 22,807.48. The S&P 500 rose 52.87 points, or 0.8%, to 6,869.50, while the Dow Jones Industrial Average increased by 238.14 points, or 0.5%, to 48,739.41.
The rebound on Wall Street came as investors took advantage of lower share prices after Tuesday’s sell-off pushed the major averages to their lowest levels in three months.
Investor sentiment also received a boost from encouraging U.S. economic data, including a report from payroll processor ADP indicating stronger-than-expected job growth in the private sector during February.
ADP reported that private payrolls increased by 63,000 jobs in February after rising by a downwardly revised 11,000 in January.
Economists had anticipated an increase of around 48,000 jobs, compared with the initially reported gain of 22,000 in the previous month.
Another report from the Institute for Supply Management indicated that activity in the U.S. services sector unexpectedly accelerated in February.
The ISM said its services PMI rose to 56.1 in February from 53.8 in January, with readings above 50 signaling expansion. Economists had expected the index to slip slightly to 53.6.
Following the surprise increase, the services PMI reached its highest level since July 2022, when it stood at 56.5.
Early buying interest was initially supported by a temporary pullback in oil prices, although stocks maintained their momentum even as crude prices later moved higher again.
Telecommunications companies saw notable gains during the session, pushing the NYSE Arca North American Telecom Index up 2.2%.
Networking stocks also performed strongly, with the NYSE Arca Networking Index advancing by 2.2%.
Semiconductor, biotechnology and computer hardware shares also posted solid gains, helping drive the strong performance of the technology-heavy Nasdaq.