US stock futures indicated a positive start in Friday’s trade, May 8, after all three key headline indices closed the previous volatile session in the red. Traders continue to monitor the latest developments in West Asia.
Futures tied to the S&P 500 rose 0.5%, while those linked to the Nasdaq Composite rose 0.7% and Dow Jones Industrial Average was up by 0.30%. In the previous session, both the S&P 500 and Nasdaq Composite scaled fresh record highs before giving up all their gains and ending the session lower.
Tensions in the Middle East, which earlier appeared to be moving toward a long-term peace deal, resurfaced after US and Iranian forces clashed near the Strait of Hormuz, reviving concerns over energy supplies and testing the durability of the rally that had lifted equities to record highs.
US President Donald Trump said on Thursday that three US Navy destroyers were attacked as they moved through the Strait of Hormuz, adding that “no damage was done to the three destroyers, but great damage was done to the Iranian attackers.”
Iran, however, accused the United States of breaching the ceasefire, an agreement that has been punctuated by intermittent clashes since it was announced on April 7.
Trump reportedly said the ceasefire with Iran remained in place despite fresh clashes between US and Iranian forces, reinforcing hopes that a broader agreement could still be reached.
Before the latest clashes, the US had floated a proposal that would formally end the conflict, but it did not address two of Iran’s core demands — suspending its nuclear programme and reopening the Strait of Hormuz. Iran said on Thursday that it was still reviewing the latest American proposals to end the conflict.
Better-than-expected performance from technology majors and strong earnings from chipmakers revived hopes that AI demand would remain resilient, positioning all three key averages to end the week with healthy gains.
The Nasdaq is on pace to climb 2.8% for the week. The S&P 500 is on track for a 1.5% weekly gain, while the Dow Jones has lagged with a week-to-date rise of just 0.2%.
Elsewhere, the dollar hovered around pre-war levels amid optimism the US-Israel conflict with Iran was nearing an end. Investors will now look ahead to the release of April’s unemployment rate and non-farm payrolls data.
Crude prices regain strength
After three straight sessions of losses, crude oil prices regained strength amid fresh clashes, as traders grew concerned that a prolonged closure of the Strait of Hormuz could disrupt global oil and gas supplies.
Brent crude, the international benchmark, rebounded 3$ to an intraday high of $103 a barrel, recovering some of its recent losses. Despite the rebound, oil prices are still down more than 6% this week.
US benchmark crude also recovered, rising $3.83 a barrel to hit the day’s high of $98.64. However, it remains on track to end the week with a decline of nearly 7%.
US stocks in focus today
In the pre-market trade, Akamai Technologies gained 27% after the company said a leading U.S.-based frontier model provider has committed to $1.8 billion, while Microchip Technology rises 3% after better-than-expected performance in the March quarter. Weaker earnings drove CoreWeave stock to crash 7%.
Vested Finance said that strong earnings from major AI and semiconductor companies continue to fuel optimism that the AI spending boom is far from over. However, it pointed out that outside the technology sector, the global picture is becoming increasingly uncertain.
Brent crude briefly jumped nearly 3% before settling around $100 a barrel following fresh clashes involving Iranian forces and US military assets near the Strait of Hormuz.
According to the brokerage, the market is currently balancing two completely opposite forces at the same time.
On one side, there is strong AI-driven earnings momentum pushing equities higher. On the other, there are rising geopolitical risks and stubbornly high oil prices threatening inflation and global growth. So far, investors are choosing to focus on earnings, it added.
It noted that the stronger-than-expected US jobs could reinforce fears that the Federal Reserve will keep interest rates elevated for longer. However, a weaker report could revive hopes for eventual rate cuts later this year.
(With inputs from Reuters)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
