U.S. stock futures stabilize after oil price surge triggers sell-off

Investing.com - On Thursday evening, U.S. stock index futures were nearly unchanged, following a day of continued selling on Wall Street. Investors remained cautious ahead of escalating tensions in the Middle East, soaring oil prices, and the release of key U.S. employment data.

S&P 500 futures rose slightly by 0.1% to 6,843.50, Nasdaq 100 futures increased by 0.1% to 25,072.75, as of 8:10 p.m. Eastern Time (00:10 GMT). Dow futures gained 0.2% to 48,064.0.

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Rising oil prices weigh on Wall Street

On Thursday, major U.S. stock indexes closed lower, extending broader declines for the week, as geopolitical risks and rising energy prices dampened risk appetite.

The Dow Jones Industrial Average fell 1.6%, the S&P 500 declined 0.6%, and the Nasdaq Composite closed down 0.3%.

Oil prices surged sharply during the session, with tensions in the Middle East intensifying and concerns over shipping routes in the Persian Gulf increasing, causing crude prices to jump over 8%.

The spike in oil prices heightened inflation worries and weighed on stocks, especially growth stocks sensitive to interest rates.

Rising energy prices often squeeze corporate profit margins and consumer spending, while also complicating the Federal Reserve’s efforts to control inflation.

Geopolitical tensions also prompted investors to shift toward safer assets, leading to increased volatility across global financial markets this week.

Jobs data to be released on Friday

Market participants are currently awaiting the release of the February U.S. non-farm payroll report on Friday, which could provide new signals about the health of the labor market and the outlook for monetary policy.

Economists expect the U.S. economy added about 58,000 jobs in February, with recent data surpassing expectations, and the unemployment rate is expected to remain around 4.3%.

The employment report is expected to play a key role in shaping market expectations for Fed rate cuts this year. A strong labor market could give policymakers room to keep interest rates higher for longer.

Traders currently expect the Federal Reserve to begin easing policy later this year, although recent economic resilience and geopolitical risks have tempered expectations for significant rate cuts.

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