March 20 - U.S. stock futures traded lower and unevenly on Friday as the conflict in Iran extended toward a fourth week, unsettling energy markets and prompting investors to sharply adjust their bets on when the Federal Reserve will begin cutting interest rates.
A report said the Trump administration is considering plans to occupy or blockade Iran's Kharg Island to pressure Iran to reopen the Strait of Hormuz. The prospect of further disruption to oil flows pushed crude prices higher, erasing the declines seen after major European nations, Japan and the United States signaled plans to boost energy supply.
Energy and volatility
Brent crude was last up about 1.7% and trading at just over $110 a barrel. The CBOE volatility index, often called Wall Street's fear gauge, rose 1.72 points to 25.78 as traders weighed the geopolitical risks. Futures linked to the rate-sensitive Russell 2000 fell roughly 1% in early action.
Corporate pockets of resilience
Amid the macro noise, investors found some relief in FedEx's quarterly update. The package delivery company reported results and issued a forecast that markets received positively, sending its shares up 10% in premarket trade. Rival United Parcel Service added about 1%.
FedEx said global demand was holding steady at the start of March despite the war in Iran, and that fuel surcharges were helping preserve profit margins in the face of rising fuel costs. The company's performance was noted for providing a limited offset to broader market pressure.
Monetary policy and market pricing
This week featured decisions from several major central banks, and central bankers - including those at the Federal Reserve - acknowledged the conflict had made policy choices more complicated. Although U.S. officials continue to pencil in at least one quarter-point interest-rate cut this year, traders have become less confident about that timeline.
Using LSEG-compiled data, market participants have pushed out the timing for a Fed rate cut to sometime in 2027, from December 2026 earlier this month.
Early futures readings
At 06:06 a.m. ET, Dow E-minis were down 242 points, or 0.52%, S&P 500 E-minis were down 39 points, or 0.59%, and Nasdaq 100 E-minis were down 200.5 points, or 0.82%.
Both the S&P 500 and the Dow were on pace to close out their fourth consecutive week in negative territory, although a modest rebound in some artificial intelligence-related names, including Advanced Micro Devices and Micron, helped cushion the Nasdaq's decline.
All three major indexes slipped below their 200-day moving averages, a commonly watched technical gauge of longer-term momentum. The small-cap focused Russell 2000 briefly recorded a 10% decline from its all-time highs earlier in the week.
Notable stock moves and sector trends
Shares of Super Micro Computer plunged about 23% after authorities charged three people associated with the AI server maker with helping to smuggle at least $2.5 billion of U.S. artificial intelligence technology to China in breach of export laws.
Energy names continued to perform strongly. The S&P 500 energy sector index was on track for its thirteenth straight week of gains as geopolitical events in Venezuela and the Middle East shaped much of the first quarter's market narrative. Halliburton rose roughly 1% while Cheniere Energy added about 3%.
Broadcasting company Tegna jumped 9.4% after the Federal Communications Commission said it had approved the $3.54 billion sale of the local television station owner to Nexstar.
Extra-market commentary
Some market tools and services highlighted FedEx as an example of how individual company dynamics can diverge from macro pressures. One investment tool described its AI-driven model that evaluates thousands of companies and cited previous notable winners in its strategies, including Super Micro Computer and AppLovin, while inviting readers to explore whether FedEx features in its current strategies.
Overall, Friday's trading underscored how the escalation of the Iran conflict and its effects on energy prices are feeding through to financial markets and forcing investors to recalibrate expectations for monetary easing.