U.S. stock index futures moved higher in early trading Friday, finding tentative support after President Donald Trump extended a deadline for potential military action against Iranian power facilities by ten days. This development provided a measure of relief to Wall Street following a severe Thursday session that officially pushed the technology-heavy Nasdaq Composite into a correction.
Brent crude futures, a global oil benchmark, declined approximately 0.7% to trade around $107 per barrel. While off its highs, the price remains significantly elevated, keeping market participants vigilant about energy costs and their inflationary impact.
Market Rout Pushes Nasdaq Past Correction Threshold
Thursday's trading was marked by a broad-based selloff. The Dow Jones Industrial Average plummeted 469.38 points to close at 45,960.11. The S&P 500 fell 114.74 points to 6,477.16. The Nasdaq Composite bore the brunt of the decline, shedding 521.74 points to finish at 21,408.08. This close left the index down 10.7% from its October 29 peak, meeting the common definition of a correction—a decline of more than 10% from a recent high.
Losses were led by major technology and communication services stocks. Meta Platforms sank nearly 8%, Alphabet dropped over 3%, and Nvidia retreated more than 4%. Only the energy and utilities sectors within the S&P 500 managed to eke out gains for the day.
Geopolitics and Oil Dictate Sentiment
With key economic data delayed—the Bureau of Economic Analysis postponed the release of the February Personal Income and Outlays report, which includes the critical PCE price index, to April 9—market focus has shifted almost entirely to geopolitical developments and commodity prices. Traders are assigning roughly a 50% probability to a Federal Reserve interest rate hike in September, but for now, oil prices and news from the Middle East are the primary drivers.
Analysts warn the volatility could persist. "Frayed nerves are showing up," noted Michael James, managing director of equity trading at Rosenblatt Securities. Gene Goldman, chief investment officer at Cetera Investment Management, expects market swings to continue until there is greater clarity on how the Middle East conflict concludes.
The risks are substantial. Analysts at Macquarie have suggested crude oil could reach $200 per barrel if the regional conflict extends beyond June. Phillip Nova analyst Priyanka Sachdeva observed that crude is now trading on "war longevity, not just headlines." A renewed climb in Brent prices would force equity markets to contend with a more challenging environment of sluggish economic growth coupled with persistent inflation.
Earnings Resilience Amid the Turmoil
Despite the market turmoil, the underlying corporate earnings picture remains robust. According to LSEG data cited by Reuters, S&P 500 companies are on track for roughly 14% profit growth in the first quarter, maintaining the estimate level seen at the start of the year. Krishna Chintalapalli, a portfolio manager at Parnassus Investments, noted that U.S. companies have grown more resilient in the face of geopolitical shocks over time.
Market strategists viewed Thursday's plunge as a sobering event. Steve Sosnick, chief strategist at Interactive Brokers, characterized the decline as a "meaningful wakeup call" for those assessing stock-market risk. Peter Tuz, president of Chase Investment Counsel, stated that a pullback of 10% to 20% would not be unusual after three strong years for markets but acknowledged that soft technical indicators might keep buyers on the sidelines temporarily.
The week has seen sharp reversals. Just a day before the selloff, the Dow had gained 0.66%, the S&P 500 rose 0.54%, and the Nasdaq advanced 0.77% as oil prices dipped and traders anticipated de-escalation.
Other economic data provided limited direction. Weekly initial jobless claims edged up by 5,000 to 210,000, while continuing claims dipped to 1.819 million, indicating a still-tight labor market with muted layoffs but no significant pickup in hiring. Entering Friday's session, the Dow held a modest 0.8% weekly gain, while the S&P 500 was down 0.5% and the Nasdaq had lost 1.1% for the week, with the premarket futures bounce doing little to erase those deficits.
