Dow futures experienced a slight increase on Friday morning following a week in which U.S. equities continued their decline, influenced by the ongoing conflict in Iran and rising oil prices. Futures associated with the Dow Jones Industrial Average declined by 79 points, or 0.16%, reversing the upward trajectory observed earlier. S&P 500 futures, Nasdaq 100 futures experienced a decline of 0.2% following an overnight increase. Major stock averages experienced a decline on Thursday, driven by concerns regarding the intensifying U.S.-Iran conflict. The Dow experienced a decline of nearly 785 points, equivalent to 1.6%, positioning the index for its second consecutive negative week and marking its most significant weekly drop since last October. The S&P 500 experienced a decline of approximately 0.6%, whereas the Nasdaq Composite saw a decrease of nearly 0.3%.

In the regular session, eight of the eleven sectors experienced declines, with industrials, materials, and consumer staples each suffering losses exceeding 2%. Caterpillar experienced a decline of over 3%, whereas United Airlines saw a reduction of 5%. Oil prices fluctuated Friday morning, as investors assessed the implications of the U.S.-Iran conflict on global energy supply. Overnight, the price of both Brent and West Texas Intermediate crude oil experienced a decline; however, by 4:30 am, prices were beginning to rise again. The moderation in price increases had previously bolstered sentiment across global markets, propelling stock indices in Europe and Asia upward during their concluding trading sessions of the week.

Crude prices are on track to achieve their largest weekly percentage increase since March 2022. “Markets remain in risk‑off mode as worries grow about the duration of the conflict and potential disruptions to energy supply,” said Angelo Kourkafas. The recent increase in U.S. oil prices is contributing to inflationary worries that may exert pressure on consumer spending. To be sure, Kourkafas added, “structural shifts have reduced U.S. vulnerability to oil shocks.” In our assessment, oil prices would need to sustain levels above $100 for a considerable duration to significantly impede economic growth. The United States has maintained its status as a net exporter of oil since 2019, and the overall economy exhibits significantly lower energy intensity compared to previous years.

On Friday, market participants will be presented with a fresh catalyst as February’s nonfarm payrolls are set to be released at 8:30 am. Economists surveyed by Dow Jones anticipate an increase of 50,000 jobs, a decline from the 130,000 payrolls recorded in January. The expectation is that the unemployment rate will remain stable at 4.3%. This week, the S&P 500 is projected to decline by 0.7%, whereas the 30-stock Dow has experienced a decrease of 2.1%. The tech-heavy Nasdaq is on track to achieve a gain of approximately 0.4%.