U.S. equity futures drifted down on Thursday as a new wave of strikes on energy infrastructure in the Middle East sent crude and natural gas prices higher, feeding investor concerns about a renewed inflation impulse and near-term economic disruption.
By 06:43 ET (10:43 GMT), futures for the Dow were down 67 points, or roughly 0.2%. S&P 500 futures had slipped by 12 points, also about 0.2%, while Nasdaq 100 futures were lower by 74 points, or approximately 0.3%.
The weakness followed a steep drop in the cash session the previous day, when the major U.S. averages fell after an attack on the South Pars gas field - the Iranian portion of the world’s largest natural gas deposit. The initial strike prompted retaliatory targeting by Tehran on gas facilities in Qatar and Saudi Arabia, heightening fears that the fighting involving Iran and joint U.S.-Israeli forces could broaden across the region.
Energy markets reacted sharply to the disruptions. Brent crude futures surged well above $112 per barrel, while U.S. West Texas Intermediate (WTI) also advanced. At 07:06 ET, Brent was up 6.0% at $113.87 a barrel, and WTI had risen 0.9% to $96.25 a barrel. The spread between the two benchmarks has widened to its largest gap in over a decade, a divergence the market attributes in part to releases from U.S. strategic petroleum reserves.
European natural gas prices climbed roughly 25% after strikes hit Ras Laffan in Qatar, the world’s largest liquefied natural gas (LNG) production site, which can account for as much as one-fifth of global LNG supply. That development intensified concerns about global energy availability and the potential for further upward pressure on consumer prices.
"The move to strike Iranian energy assets is odd, given that the U.S. administration has been trying over the last couple of weeks to ease the upward pressure on oil prices," analysts at ING said in a statement, highlighting the disconnect between diplomatic efforts to calm markets and the unfolding military strikes.
President Donald Trump denied any U.S. or Qatari role in the attack on South Pars, instead attributing the bombardment to Israel. Meanwhile, the effective closure of the Strait of Hormuz has added another layer of supply risk; about 20% of the world’s oil passes through the narrow waterway south of Iran, and many vessels have avoided transits amid concerns over potential Iranian attacks.
There were few signs of cooling tensions. White House officials are considering deploying thousands of U.S. troops to reinforce its operations in the region, Reuters reported, a move that would underscore the elevated security environment but also raise questions about the duration and scope of any military commitment.
Inflation and central bank focus
Rising energy prices have revived worries about higher inflation globally. Those concerns were compounded by U.S. producer price index data for February that came in hotter than expected, reinforcing fears that inflationary pressures were persisting in the world’s largest economy even prior to the recent Middle East hostilities.
Against that backdrop, the Federal Reserve’s policy decision this week to hold the federal funds rate steady at a range of 3.5% to 3.75% offered a mixed signal. While the Fed left rates unchanged, its Summary of Economic Projections and accompanying dot plot suggested some policymakers still expect rate reductions in the future.
Specifically, a dozen of the 19 participants at the Fed’s most recent meeting forecast at least one rate cut in 2026, mirroring their December outlook. Analysts at Capital Economics characterized the statement and dot plot as "arguably not as hawkish as many speculated, with the Summary of Economic Projections (SEP) still pointing to one interest rate cut this year, despite an upgrade to the median projections for inflation." They added that this reinforces their view the Federal Open Market Committee would "look past a short-lived inflation spike," particularly under the prospective leadership of Kevin Warsh - President Trump’s nominee for the next Fed chair.
At his post-decision press conference, Chair Jerome Powell cautioned investors to treat the Fed’s forecasts "even more than usual" with skepticism. He also described the current policy rate as being at a level that neither appreciably helps nor hinders growth - a characterization that implies limited room for steep near-term rate reductions, especially if energy-driven inflation persists.
Market moves in equities and earnings
Fears around energy-driven inflation and geopolitical escalation translated into notable declines in equity markets during the prior session. By the close, the Dow Jones Industrial Average had lost 1.6% of its value, the S&P 500 had fallen 1.4%, and the Nasdaq Composite had dropped 1.5%.
On the corporate front, Micron Technology reported a dramatic year-over-year improvement in its fiscal second-quarter results but still saw its shares trade lower in premarket activity. The Idaho-based memory-chip maker said adjusted earnings per share were $12.20 for the quarter ended February 26, up from $1.56 a year earlier and ahead of analyst expectations of $8.79. Revenue for the period rose 196% to $23.86 billion from $8.05 billion a year earlier, surpassing consensus estimates of $19.19 billion. Gross margin climbed to a record 74.9%, a gain of 18 percentage points from the prior quarter.
Despite the strong results, Micron indicated it would increase capital spending in fiscal 2026 to more than $25 billion, roughly $5 billion higher than previously forecast, a move that weighed on its stock. Shares fell more than 6% in premarket trade following the announcement.
"In the AI era, memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand," Chief Executive Sanjay Mehrotra said, outlining the company’s rationale for the heavier investment pace.
What investors are watching next
- How energy price dynamics evolve as damage assessments and operational impacts from the strikes become clearer.
- Next central bank communications and meetings, as policymakers reassess inflation trajectories amid volatile commodity markets.
- Corporate guidance and capital expenditure plans from energy-sensitive and technology companies that could be affected by both cost pressures and shifts in demand.
With energy markets in flux and inflation indicators showing persistence, investors are parsing data and central bank signals closely to judge the outlook for borrowing costs, corporate earnings, and broader economic growth.