Market snapshot
Futures tied to major U.S. equity benchmarks were modestly higher on Friday even as market sentiment remained fragile amid a spike in regional hostilities. By 03:06 ET (08:06 GMT), the Dow futures contract had gained about 50 points, or 0.1%, S&P 500 futures were up roughly 8 points, or 0.1%, and Nasdaq 100 futures were up near 65 points, or 0.3%.
Stocks on Wall Street fell in the previous trading session, a pullback attributed in part to a rise in oil prices that has amplified concerns about potential interruptions to flows through the narrow Strait of Hormuz, a strategic waterway south of Iran.
Energy and supply concerns
Crude prices have climbed sharply since the U.S. and Israel carried out joint strikes against Iran, with U.S. crude futures up almost 21% over that span. The fighting, which has extended to other areas of the Middle East and the Persian Gulf, has heightened the risk that shipments passing through the Strait of Hormuz could be curtailed or disrupted.
The rise in oil has already translated into higher pump prices for U.S. consumers. Average gasoline costs in the U.S. have increased by 27 cents since the start of the assault, reaching $3.25 per gallon, according to data cited by Reuters from travel group AAA.
Those higher energy costs have prompted some investors to worry that a prolonged period of conflict could lift inflationary pressures. That, in turn, could delay expectations for rate cuts from the Federal Reserve later in the year. Rising U.S. bond yields have also weighed on equities.
The impact of higher crude has not been confined to the U.S. Asian equities and currencies felt pressure as well, particularly in markets that are heavily reliant on oil shipments through the Strait of Hormuz. South Korea, a major importer of oil that transits the waterway, saw its Kospi index finish largely flat on the most recent trading day but decline by 10.56% over the prior one-week period. European benchmarks were also poised to record their largest weekly drops since last April.
Policy and market responses
In response to supply worries, U.S. officials outlined a short-term move to allow the sale of Russian oil to India for a 30-day period, a step aimed at easing some strain on global supplies. Analysts cautioned, however, that such a measure is unlikely to be a definitive solution. ING analysts said that while the move might exert some immediate downward pressure on oil, a sustained reduction in prices will likely require a return to normal flows through the Strait of Hormuz.
The U.S. Treasury Department was also reported to be preparing measures intended to influence energy prices via financial markets. At the same time, there were no clear signs that the fighting would abate soon. Media reports described Israeli strikes at Hezbollah targets in Lebanon and actions directed at Tehran, while Iran's Revolutionary Guards reportedly launched drones and missiles toward Tel Aviv.
Separately, coverage indicated a delay in naming a successor to Ayatollah Ali Khamenei after he was killed in U.S. and Israeli air strikes, with Mojtaba Khamenei reportedly viewed as a frontrunner for the post. U.S. President Donald Trump was quoted as calling that potential appointment "unacceptable."
Jobs report in focus
Even as the conflict dominated headlines this week, market participants were preparing to refocus on domestic economic fundamentals with the release of the U.S. February jobs report. Consensus expectations called for the economy to have added about 58,000 jobs in February, a slowdown from January's 130,000 gain, and for the unemployment rate to remain at 4.3%.
Federal Reserve officials have been closely monitoring a labor market that has generally shown resilience, even as measures of hiring and firing have not been particularly elevated. The central bank has kept interest rates unchanged while seeking greater clarity on the path of employment before altering policy.
Artificial intelligence is entering the conversation around labor dynamics. Observers and some corporate actions have highlighted the risk that AI adoption could bring about job reductions in white-collar roles as companies seek cost savings and productivity gains through new tools. A recent decision by payments firm Block to cut roughly 40% of its workforce was cited as a catalyst that intensified those concerns in markets and among analysts.
Semiconductor sector developments
Shares of Marvell Technology surged in extended trading, rising by more than 14% after the semiconductor company raised its full-year revenue outlook. The upgrade stemmed from robust data center spending tied to artificial intelligence initiatives by major hyperscalers.
Large technology firms, including Amazon and Microsoft, have prioritized artificial intelligence and are allocating substantial capital toward building the data centers needed to power and train AI systems. Companies that supply the internal hardware and networking components for these facilities have been among the beneficiaries of that spending.
Marvell's management told investors that the company now expects fiscal 2027 revenue to rise by more than 30% year over year to nearly $11 billion. The firm's data center segment, in particular, is forecast to drive year-on-year revenue growth in every quarter of fiscal 2027, according to the company's statements.
Chip supply and geopolitics
Separately, the Financial Times reported that Nvidia requested contract chipmaker TSMC to stop producing certain chips destined for China, amid a backdrop of U.S. export controls and softer sales prospects in that market. The report said Nvidia had shifted manufacturing capacity at TSMC away from its H200 chips toward the next-generation Vera Rubin hardware.
That production reallocation signals that Nvidia may no longer anticipate significant sales of the older H200 chips in China, given rising uncertainty over export restrictions and regulatory pushback. President Trump previously indicated last December that Nvidia could sell H200 chips in China; the H200 remains among the most advanced processors Nvidia is permitted to sell there under current U.S. export rules. However, lawmakers and regulators have been pursuing stricter constraints on how such chips can be used in China, and Chinese authorities were reported to be seeking greater self-reliance in the AI technology space.
What this means for markets
Investors are navigating a market environment in which geopolitical risks tied to the Iran conflict are interacting with domestic economic signals and industry-specific developments. Energy markets are reacting strongly to the potential for supply interruptions, and that reaction is rippling through equities and fixed income markets via higher bond yields and sector-specific pressures.
At the same time, earnings-related news from companies exposed to artificial intelligence spending is drawing attention. Marvell's improved guidance underscores how demand from hyperscale data center customers can materially shift revenue expectations for suppliers of networking and server components.
Finally, developments involving chip production and trade with China highlight how geopolitics and export controls can alter manufacturing plans and market expectations for hardware suppliers and chipmakers.
Bottom line
Futures trading suggests a cautious market mood as participants balance an immediate risk - disruptions to oil flows through the Strait of Hormuz - against longer-running themes including labor market resilience, the Federal Reserve's policy stance, and the boom in AI-driven data center investment. The February jobs report, Marvell's outlook, and reports about chip production shifts are likely to keep market attention divided between macroeconomic fundamentals and sectoral winners and losers.