US stock futures pointed to a higher opening on Friday, suggesting Wall Street could recover some of the losses recorded in the previous session as technology shares showed signs of stabilising and crude oil prices retreated.
Nasdaq 100 futures advanced 0.7%, indicating renewed buying interest in technology stocks following Thursday’s sell-off, which was partly driven by concerns about OpenAI’s reported revenue performance.
Although optimism surrounding artificial intelligence continues to support parts of the technology sector, investors remain cautious about valuations and the financial expectations underpinning the AI investment boom.
Lower oil prices also helped improve market sentiment, although rising US Treasury yields limited enthusiasm for a broader recovery.
Traders were additionally positioning ahead of important US inflation reports and the start of the quarterly corporate earnings season next week.
Inflation Reports and Bank Earnings Set to Drive Market Direction
The US Labor Department is scheduled to publish consumer and producer inflation figures next week, providing fresh evidence of price pressures across the economy.
The reports will be closely monitored for indications of whether inflation is moderating sufficiently to ease concerns about further increases in interest rates.
Meanwhile, the quarterly earnings season will begin with results from several major US financial institutions, including Citigroup (NYSE:C), JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Bank of America (NYSE:BAC).
Investors will examine the banks’ profitability, lending activity and management guidance for indications of broader economic conditions.
Daniela Hathorn, senior market analyst at Capital.com, said the combination of corporate earnings and inflation trends would be particularly important for equities.
“Strong earnings combined with moderating inflation would offer the most supportive backdrop for equities,” Hathorn said.
She also warned that markets could face renewed pressure if inflation remains elevated while corporate earnings expectations weaken.
“Conversely, persistent price pressures alongside disappointing corporate guidance could expose the vulnerability of a market increasingly dependent on a relatively small group of technology companies to sustain its rally.”
Her comments highlighted the concentration of recent market gains among major technology companies and the potential risks if their earnings performance fails to justify investor expectations.
Nasdaq Falls 1.3% as Technology Shares Lead Thursday’s Decline
US equities finished mostly lower on Thursday, extending the modest losses recorded in the previous session.
The technology-heavy Nasdaq Composite dropped 345.35 points, or 1.3%, to close at 27,193.34, retreating further from the record closing high reached on Tuesday.
The S&P 500 declined 36.41 points, or 0.5%, to 7,765.36.
The Dow Jones Industrial Average moved against the broader downward trend, gaining 51.77 points, or 0.1%, to finish at 51,231.64.
Although the Nasdaq recovered from its intraday lows, selling pressure remained concentrated in technology-related sectors.
The decline reflected a combination of concerns about geopolitical tensions, rising energy prices and uncertainty surrounding the financial outlook for artificial intelligence businesses.
Oil Prices Surge on Renewed Middle East Tensions
Thursday’s initial market weakness followed a sharp increase in crude oil prices amid concerns about a possible escalation of the conflict involving Iran.
US crude futures rose after NBC News reported that President Donald Trump and his national security advisers had discussed the possibility of resuming large-scale military operations against Iran in the coming weeks.
Citing a US official and another individual familiar with the discussions, the report indicated that options under consideration included military strikes before next month’s midterm elections.
Oil prices subsequently retreated from their highs after Trump denied that the United States would attack Iran before the elections.
The comments briefly supported a recovery attempt in US equities as concerns about an immediate military escalation eased.
However, crude prices remained substantially higher during the session amid continued attacks on oil tankers in the Middle East and fears of hurricane-related disruptions to energy production in the Gulf of Mexico.
The volatility highlighted the sensitivity of financial markets to geopolitical developments and potential disruptions to global oil supplies.
Higher energy prices can increase inflationary pressures and operating costs, creating additional challenges for companies and consumers.
OpenAI Revenue Report Weighs on Technology Sector
Selling pressure intensified later in Thursday’s session following a Financial Times report concerning OpenAI’s annualised revenue.
According to the report, which cited financial documents shared with investors, OpenAI’s annualised revenue was approximately $20 billion below the level the company had previously indicated.
The report raised questions about revenue expectations within the artificial intelligence industry and contributed to a broader decline in technology shares.
Investor concerns were particularly evident among semiconductor companies, which have benefited from expectations of sustained investment in AI infrastructure.
The Philadelphia Semiconductor Index plunged 3.4% during the session, reflecting substantial weakness across the chipmaking sector.
Computer hardware stocks also declined sharply, with the NYSE Arca Computer Hardware Index falling 2.5%.
Networking and biotechnology stocks recorded significant losses, adding to the negative tone across growth-oriented sectors.
By contrast, oil producers advanced as higher crude prices improved the near-term outlook for energy-related revenues.
Technology Rebound Faces Test from Treasury Yields and Economic Data
Friday’s stronger futures suggested investors were looking for opportunities to recover some of the previous session’s losses, particularly among technology companies.
The retreat in oil prices offered additional support by reducing immediate concerns about energy-driven inflation.
However, the rebound in US Treasury yields remained a potential obstacle for equities, particularly growth stocks whose valuations are sensitive to interest rate expectations.
Market participants are also likely to remain cautious ahead of next week’s inflation figures and corporate earnings announcements.
The combination of economic data, geopolitical developments and company results could determine whether Wall Street’s recent volatility continues or gives way to a more sustained recovery.
For technology stocks, investors will be assessing whether optimism about artificial intelligence can offset concerns about revenue growth, valuations and the concentration of market gains.