US Futures Stabilize Ahead of PCE Data

US stock futures edged higher on Friday after heavy losses in the prior session, as investors prepared for another key inflation reading. January’s PCE price index, the Federal Reserve’s preferred inflation gauge, is set for release later today, though it will not capture the impact of the Iran war. Other notable releases include the first revision of Q4 US GDP growth and March consumer confidence. In Thursday’s regular trading, the Dow fell 1.56%, the S&P 500 dropped 1.52%, and the Nasdaq Composite declined 1.78%, with all three closing at their lowest levels since November. Eight of the 11 S&P sectors ended lower, led by industrials, consumer discretionary, and health. The declines came as oil prices surged after Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz effectively closed. Tehran increased attacks on shipping assets while US and Israeli strikes on Iran continued.

The Dow Jones Index dropped -739 points or 1.56 percent on Thursday to close at 46678 points. Losses were led by Goldman Sachs (-4.47%), Boeing (-4.29%) and 3M (-3.91%).

The S&P 500 and the Dow both closed 1.5% lower while the Nasdaq shed 1.7% on Thursday as investors navigated the intensifying conflict in the Persian Gulf that drove crude oil prices toward 100 dollars per barrel following defiant rhetoric from the new Iranian supreme leader. Investors weighed the lack of an immediate resolution to the war alongside further increases in energy costs. International benchmark Brent crude settled above 100 dollars per barrel after Mojtaba Khamenei declared that the Strait of Hormuz must remain closed to pressure international rivals. Market participants largely shrugged off the record coordinated release of 400 million barrels from emergency reserves by the IEA. Financial stocks faced additional pressure as Morgan Stanley shares sank 4.1% after the firm capped withdrawals from private credit funds. Traders expect the Federal Reserve to maintain interest rates next week as officials wait for clarity on the economic impacts of the war.