U.S. stock index futures indicate a weaker opening for markets on Friday, suggesting equities may continue to fall after the sharp losses recorded in the previous session.
A renewed surge in crude oil prices is expected to weigh on investor sentiment, with global benchmark Brent crude climbing back above $110 per barrel after jumping more than 5% during Thursday’s trading.
The continued rise in oil prices comes despite President Donald Trump’s decision to extend the pause on potential attacks against Iran’s energy facilities by 10 days, pushing the deadline to April 6.
In a post on Truth Social, Trump said negotiations with Iran are “going very well,” though Iranian state media reported that Tehran had “responded negatively” to a peace proposal from Washington.
“Comments from Washington and Tehran about a potential peace process seem to come from parallel worlds, with the former indicating talks are going well while the latter effectively denies talks are even happening,” said AJ Bell investment director Russ Mould.
“For now, fighting continues and the path out of the current crisis remains unclear,” he added. “Oil prices, probably the best indicator, remain elevated and have reached $110 per barrel again.”
Mould also noted that the longer oil prices stay at elevated levels, the greater the concern that inflationary pressures could re-emerge.
Stocks fall sharply in previous session
U.S. stocks had already come under pressure earlier on Thursday and continued to slide as the session progressed, ultimately closing significantly lower. The sharp declines pushed both the Nasdaq and the S&P 500 to their lowest closing levels since early September last year.
The major indexes finished the day just above their intraday lows. The Nasdaq dropped 521.74 points, or 2.4%, to close at 21,408.08, the S&P 500 fell 114.74 points, or 1.7%, to 6,477.16, and the Dow Jones Industrial Average declined 469.38 points, or 1%, ending at 45,960.11.
Thursday’s sell-off extended the volatile back-and-forth pattern seen in recent sessions, as traders reacted to ongoing swings in oil prices.
Global benchmark Brent crude had surged more than 5% after falling by over 2% during Wednesday’s trading.
The rebound in oil prices reflects continued uncertainty surrounding peace negotiations in the Middle East. Iran rejected a U.S. proposal to pause the conflict, saying any ceasefire would occur only on Tehran’s own conditions and timetable.
In a post on Truth Social, President Donald Trump described Iranian negotiators as “very different” and “strange” but claimed they are “begging” the U.S. to make a deal.
“They better get serious soon, before it is too late, because once that happens, there is NO TURNING BACK, and it won’t be pretty!” Trump warned.
Escalation fears add to market pressure
Investor concerns were also heightened after several Gulf nations issued a joint statement condemning Iran’s “criminal” attacks on their energy infrastructure.
The statement, released by the United Arab Emirates, Kuwait, Bahrain, Saudi Arabia, Qatar and Jordan, specifically referenced strikes carried out by Iran-aligned armed groups operating from Iraqi territory.
“While we value our fraternal relations with the Republic of Iraq, we call on the Iraqi government to take the necessary measures to immediately halt the attacks launched by factions, militias, and armed groups from Iraqi territory toward neighboring countries,” the statement said.
The Gulf states also reaffirmed their right to defend themselves and to “take all necessary measures to safeguard our sovereignty, security, and stability.”
Tech and cyclical stocks lead declines
Technology-related sectors experienced notable weakness during the session, with computer hardware, semiconductor and networking companies posting significant losses and contributing heavily to the drop in the tech-focused Nasdaq.
Outside the technology sector, gold mining stocks also fell sharply alongside the decline in bullion prices, sending the NYSE Arca Gold Bugs Index down 3.7%.
Steel, housing and airline stocks also recorded substantial losses, while energy producers moved higher in line with the sharp rise in crude oil prices.