Early Friday, stock futures took a downward turn as tensions flared up once again between Israel and Iran.
According to a source familiar with the situation as reported by NBC News, Israel carried out a restricted strike against Iran. Earlier, Iran’s Fars news agency noted explosions near Isfahan city’s airport in central Iran, though the cause remains undisclosed.
In Asian morning trading, oil prices surged over 3%, pushing global benchmark Brent crude futures above $90 per barrel. However, these gains have since moderated, with crude futures now trading approximately 1.7% higher.
Futures linked to the Dow Jones Industrial Average dropped by 280 points, marking a 0.76% decline. S&P 500 futures saw an 0.88% decrease, while Nasdaq 100 futures were down by 0.98%.
Even after reporting quarterly earnings that exceeded expectations on both revenue and profit, Netflix shares experienced a dip of over 4% in after-hours trading. Although the streaming giant witnessed a 16% increase in subscribers compared to the previous year, it announced plans to discontinue reporting paid memberships starting in 2025.
This week, the S&P 500 is on track for its most significant decline in nearly six months, having fallen for five consecutive sessions, resulting in a week-to-date loss of 2.2%. This downturn would mark the third consecutive negative week for the large-cap benchmark, representing its most substantial weekly decline since October 27, 2023. Currently, the S&P 500 sits 4.8% below its 52-week high.
The recent market retreat has largely been attributed to revised expectations concerning the timing of potential interest rate cuts. Economists and strategists now anticipate the Federal Reserve holding off on rate reductions until at least September, with some even considering the possibility of no cuts at all this year.
Minneapolis Fed President Neel Kashkari, not involved in this year’s rate decisions, emphasized the need for patience, suggesting that the first rate cut might not occur until 2025 during an interview with Fox News on Thursday.
Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, highlighted inflation as the primary concern for the stock market at present. He noted that the re-acceleration of inflation is dampening expectations for rate cuts in 2024.
Both the blue-chip Dow and the tech-heavy Nasdaq Composite are set for a losing week, with respective declines of 0.6% and 3.6% so far. The Nasdaq is poised for its fourth consecutive weekly decline, marking its longest losing streak since December 2022.
Companies scheduled to release quarterly results on Friday morning include consumer products giant Procter & Gamble, oilfield services company SLB, and financial services firm American Express.
