US stock futures moved higher on Friday, signalling a potential rebound at the opening bell after Wall Street suffered steep losses in the previous session amid rising oil prices and renewed pressure from bond yields.
Investors appeared willing to return to stocks following Thursday’s decline, although continued strength in crude oil and uncertainty surrounding the Middle East conflict could limit buying appetite.
US crude futures eased significantly from earlier highs but remained around 0.2% higher as markets continued to assess tensions between the United States and Iran.
Nvidia earnings and Jackson Hole move into focus
Investors may remain cautious ahead of several important events next week, including quarterly results from Nvidia (NASDAQ:NVDA) and the Jackson Hole economic symposium.
“Next week’s results from Nvidia could put some of the focus back on corporate earnings but, as we head towards the autumn, a chill has started to descend for markets,” said Dan Coatsworth, head of markets at AJ Bell.
He added, “Investors will be looking for a comfort blanket when Federal Reserve chair Kevin Warsh addresses the Jackson Hole meeting at the end of this month.”
The events could prove important for market direction, with Nvidia providing another test of enthusiasm surrounding artificial intelligence spending and Jackson Hole potentially offering fresh signals on the outlook for US monetary policy.
Dow tumbles more than 700 points
Friday’s expected rebound follows a difficult session for US equities on Thursday, when losses accelerated throughout the trading day and erased Wednesday’s modest gains.
The Dow Jones Industrial Average dropped 703.84 points, or 1.3%, to 52,759.21. The Nasdaq Composite declined 263.92 points, or 1%, to 26,067.17, while the S&P 500 fell 66.82 points, or 0.9%, to 7,641.16.
All three indices finished close to their session lows as investors reacted to renewed increases in oil prices and Treasury yields.
Trump’s Iran threats push oil higher
Geopolitical tensions remained a major source of market volatility after President Donald Trump escalated his rhetoric against Iran.
In a Truth Social post, Trump said he was launching “economic warfare” against Tehran, describing it as the “most crushing economic operation ever taken against any country.”
Trump also warned of “tremendous economic consequences” for any nation that “allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran.”
Iranian Foreign Minister Abbas Araghchi responded by describing the proposed “Economic D-Day” as a “diversion from America’s own crisis: unprecedented debt & surging interest costs.”
“Doubling down on failed policies will only bring further defeat—and enmity of Iranians,” Araghchi said in a post on X. “US economic terrorism threatens global economy and sovereignty worldwide.”
US crude futures surged almost 3% on Thursday to their highest level in nearly a month as traders interpreted the escalating rhetoric as a sign that the US-Iran conflict could remain unresolved.
Treasury yields rebound as oil pressures inflation outlook
The jump in crude prices also contributed to a sharp recovery in Treasury yields.
Bond yields had fallen significantly on Wednesday after the US Treasury announced expanded buyback operations for longer-dated government debt, but renewed concerns over energy-driven inflation reversed part of that move on Thursday.
Higher yields can pressure equity valuations by increasing borrowing costs and making fixed-income investments relatively more attractive.
Walmart plunge adds pressure to US stocks
Walmart (NYSE:WMT) was another major drag on Wall Street, with its shares falling more than 9% after the retailer reported weaker-than-expected second-quarter comparable-sales growth and issued disappointing guidance.
The decline weighed heavily on the broader retail sector, sending the Dow Jones US Retail Index down 2.5%.
Airlines were also under pressure, with the NYSE Arca Airline Index falling 2.4%, while housing, pharmaceutical and biotechnology shares recorded notable losses.
Gold stocks bucked the negative trend, advancing as the precious metal strengthened.
Friday’s positive futures therefore point to an attempted recovery following Thursday’s broad selloff, although oil prices, bond yields and geopolitical developments remain important risks ahead of Nvidia’s earnings and the Jackson Hole gathering.