U.S. stock futures moved lower on Thursday as escalating attacks on energy infrastructure in the Middle East pushed oil prices sharply higher. The Federal Reserve left its interest rate outlook unchanged, keeping open the possibility of a rate cut later this year, although Fed Chair Jerome Powell cautioned investors not to rely too heavily on those projections. Meanwhile, several other central banks are expected to keep borrowing costs unchanged as uncertainty surrounding the conflict with Iran continues. Shares of Micron (NASDAQ:MU) declined in premarket trading after the chipmaker revealed plans for a significant increase in capital spending.
Futures edge lower
Futures tied to major U.S. equity benchmarks pointed to a weaker open after renewed strikes on critical oil facilities in the Middle East fueled another rally in crude prices.
As of 04:16 ET, Dow futures were down 38 points, or 0.15%. S&P 500 futures fell by 11 points, or 0.2%, while Nasdaq 100 futures dropped 67 points, or 0.3%.
Wall Street’s main indices had already closed sharply lower in the previous session following an attack on the South Pars oil field, located in the Iranian section of the world’s largest gas deposit. Iran responded by striking gas infrastructure in Qatar and Saudi Arabia, raising concerns that the conflict involving Iran, the United States and Israel could expand into a broader regional confrontation.
The attacks pushed energy prices higher, intensifying fears of renewed inflationary pressure globally. Investors are closely watching a series of central bank decisions this week for signals on how policymakers view the outlook for inflation and interest rates.
Those concerns were further amplified by stronger-than-expected U.S. producer price data for February, which suggested inflationary pressures were already persisting in the U.S. economy even before the escalation of the Iran conflict.
By the close of trading on Wednesday, the Dow Jones Industrial Average had fallen 1.6%, the S&P 500 dropped 1.4%, and the Nasdaq Composite declined 1.5%.
Oil jumps above $112
Oil markets extended their rally, with Brent crude futures—the global benchmark—climbing well above $112 per barrel.
At 04:40 ET, Brent had surged 7.8% to $115.78 per barrel, an increase of roughly $8. U.S. West Texas Intermediate crude rose 1.6% to $97.01 per barrel. The price gap between WTI and Brent has widened to its largest level in more than a decade, partly due to the release of U.S. strategic petroleum reserves.
European gas prices also soared more than 25% after Iranian strikes hit Ras Laffan in Qatar, the world’s largest liquefied natural gas production hub, which alone accounts for roughly one-fifth of global LNG supply.
“The move to strike Iranian energy assets is odd, given that the U.S. administration has been trying over the last couple of weeks to ease the upward pressure on oil prices,” analysts at ING said in a statement.
However, President Donald Trump denied that the United States or Qatar had any involvement in the strike on South Pars, stating that Israel carried out the attack.
The latest assaults on energy infrastructure have further strained oil markets already affected by disruptions in the Strait of Hormuz. Around 20% of global oil shipments pass through the narrow waterway south of Iran, but many vessels have been unable to transit the route amid fears of Iranian retaliation.
There have been few signs that the three-week-old conflict is easing. According to Reuters, U.S. officials are considering deploying additional troops to strengthen military operations in the region.
Fed holds steady
Despite the renewed surge in oil prices clouding the inflation outlook, the Federal Reserve’s policy decision on Wednesday kept open the possibility of rate cuts later this year.
Lower borrowing costs can support economic growth and help ease pressure in the labor market, though they also risk reigniting inflation.
According to the Fed’s latest quarterly projections, 12 of the 19 policymakers still expect at least one rate cut in 2026, the same outlook presented in December.
However, speaking after the Fed left rates unchanged within a range of 3.5% to 3.75%, Powell warned that investors should treat the projections with caution “even more than usual.”
He indicated that current interest rates are roughly neutral—neither stimulating nor restraining economic activity—suggesting limited scope for reductions, particularly if energy prices keep inflation elevated.
Global central banks under scrutiny
The Bank of Japan also kept interest rates unchanged on Thursday, as widely anticipated, while warning about the inflation risks posed by higher energy costs.
The BOJ maintained its overnight call rate at 0.75% following an almost unanimous vote by its nine-member board. Board member Hajime Takata was the only dissenter, advocating a 25 basis point increase due to rising inflation risks.
Policymakers pointed to risks for medium- and long-term price stability, noting that the oil price surge presents a particular challenge for Japan, which relies heavily on imported energy passing through the Strait of Hormuz.
“Risks to the outlook include the future course of the situation in the Middle East as well as developments in crude prices,” the BOJ said in a statement.
Economists at Capital Economics said the BOJ’s comments also indicated that further rate increases could be considered if inflation continues to strengthen.
Later in the day, markets will focus on policy decisions from the European Central Bank and the Bank of England, both of which are also expected to leave interest rates unchanged. Switzerland’s central bank similarly kept its rates steady, citing increased uncertainty stemming from the Iran conflict.
Micron results
Micron Technology’s fiscal second-quarter results showed a sharp jump in revenue and profit, yet the company’s shares dropped more than 4% in premarket trading after it revealed plans to significantly increase spending on new manufacturing capacity.
The chipmaker said it intends to invest more than $25 billion in manufacturing facilities in fiscal 2026, about $5 billion more than previously projected.
Micron reported adjusted earnings per share of $12.20 for the quarter ending Feb. 26, compared with $1.56 a year earlier and well above analyst expectations of $8.79. Revenue rose 196% year-on-year to $23.86 billion from $8.05 billion, surpassing forecasts of $19.19 billion.
Gross margin reached a record 74.9%, rising 18 percentage points from the previous quarter.
“In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand,” Chief Executive Sanjay Mehrotra said.