US stock index futures are under pressure, as ongoing Iran conflicts continue to cause sharp fluctuations in oil prices

Investing.com - U.S. stock index futures came under pressure on Friday as investors focused on volatile yet still high oil prices and ongoing developments in the Iran conflict.

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As of 07:46 AM Eastern Time (19:46 Beijing Time), Dow futures fell 151 points, down 0.3%, S&P 500 futures declined 30 points, down 0.4%, and Nasdaq 100 futures dropped 150 points, down 0.6%.

Major stock indexes declined in the previous trading session, weighed down by soaring energy prices and warnings from the Federal Reserve about persistent inflation pressures.

After Israel launched an attack on South Pars (Iran’s region in the world’s largest natural gas field), Tehran retaliated against key Middle Eastern energy infrastructure, including a major natural gas production center in Qatar.

Brent crude oil prices surged to about $119 per barrel, and European benchmark natural gas prices also rose sharply.

As the U.S. and Israel expressed efforts to avoid further strikes on South Pars, markets rebounded from lows, and oil prices retreated from highs. The White House has also outlined plans to ease energy market pressures, hinting at possible sanctions relief for some Iranian oil.

Nevertheless, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, and Bank of Japan all kept interest rates unchanged this week, with policymakers choosing to spend more time assessing the impact of the conflict.

Oil prices remained high on Friday, with market concerns over supply disruptions caused by the Iran war showing little sign of abating.

Brent crude oil volatile

Brent crude futures hovered around $107 per barrel. After the attack on South Pars and Iran’s response, this global benchmark price surged earlier this week to about $119 per barrel.

Concerns were triggered by mutual bombings of key energy infrastructure, and even if the U.S. and allies successfully reopen the vital maritime route through the southern Strait of Hormuz, supply disruptions could persist long-term.

After Iran attacked Qatar’s major natural gas facility Ras Laffan, the country said its export capacity had decreased by 17%, with repairs possibly taking up to five years. Qatar is a major natural gas exporter, especially to Europe, where natural gas benchmark prices have soared, raising inflation worries.

The New York Times reported that Iran continues retaliatory strikes, with Middle Eastern countries allied with the U.S. warning of incoming drones and missiles. The paper added that after missile alerts in Jerusalem and northern Israel at night, Israel struck Tehran.

According to a statement cited by The Wall Street Journal, Iran’s Supreme Leader Ayatollah Ali Khamenei said, “We must take security from our domestic and foreign enemies and give it to our people.” This provocative message was issued by the son of the late former leader Ali Khamenei, Mojtaba Khamenei, amid Israel’s systematic strikes against Iranian regime members, aiming to topple them.

Israeli Prime Minister Benjamin Netanyahu confirmed that U.S. President Donald Trump had asked Israel to pause future attacks on Iran’s energy infrastructure.

The White House has been racing to reassure markets tense from prolonged oil price shocks. U.S. Treasury Secretary Janet Yellen hinted that Washington might release more emergency oil reserves or even lift sanctions on some Iranian crude exports to help ease supply constraints.

According to a statement from U.S. military officials cited by The Wall Street Journal, Washington and its allies are also working to reopen the Strait of Hormuz. If Iran’s attacks on ships passing through the strait can be reduced, U.S. warships might be able to escort vessels in and out of the Persian Gulf, one of the world’s most important energy-producing regions.

Vital Knowledge analysts said in a report: “The key remains the Strait of Hormuz. Until the conflict escalates sharply (involving thousands of soldiers) or a diplomatic resolution is reached, there is no fully reopened solution, and timing is critical.” They emphasized that Saudi Arabia warned that if the conflict does not end before April, oil prices could rise above $180 per barrel.

However, some analysts noted that even if Iran’s control over the strait is lifted, attacks on production facilities could continue to pressure global supplies.

Trump vowed to take all necessary measures to help de-escalate the crisis and tried to reassure Americans that “it will end soon.”

He also said there are no plans to deploy ground troops to the conflict zone, though when asked about possible deployment of land forces, Trump said, “If I do it, I won’t tell you.”

FedEx soars

Additionally, FedEx raised its full-year profit outlook after reporting better-than-expected third-quarter earnings and revenue, driven by strong demand during key holiday periods.

Notably, the company said its forecast does not assume any additional disruptions from geopolitical turmoil, but it pointed out that increased air freight costs and rerouted routes caused by the Iran war could impact this quarter’s results.

While FedEx may be forced to raise customer fees to offset soaring fuel costs caused by the conflict, this could lead consumers to cut back on shipping expenses.

However, CFO John Ditrich told Reuters that FedEx has not seen jet fuel supplies affected by the war.

FedEx stock rose over 9% in pre-market trading in the U.S.

This article was translated with the assistance of artificial intelligence. For more information, see our Terms of Use.