Wall St futures slip as Middle East turmoil rages on; jobs data on deck

By Johann M Cherian and Ragini Mathur

March 6 (Reuters) – U.S. stock index futures slipped on Friday as the conflict raging in the Middle East threatened to fuel inflation through higher energy costs, and investors awaited a pivotal jobs report.

The U.S.-Israel air campaign against Iran ​was nearing a week with no end in sight. Oil prices have surged the ‌most this week since Russia’s 2022 invasion of Ukraine as shipping through the strategic Strait of Hormuz ground to a halt.

Natural gas producer Qatar’s energy minister said it would take “weeks to months” to resume normal deliveries even in the case of an immediate ceasefire, according to a report, adding that he expects all Gulf energy producers to shut down exports ‌within ​weeks, which could drive oil to $150 a barrel.

“Volatility to remain elevated ⁠in the near term,” said UBS ⁠analysts in a note, adding that their base case is a relatively short conflict given the rapid degradation of Iranian military capabilities and U.S. political incentives to avoid prolonged high energy prices ahead of the midterm elections.

Crude prices edged higher and sent airlines American and Delta about 2% ​lower in premarket trading. The S&P 500’s passenger airlines subindex is on track for a 9% weekly drop.

A crucial jobs report is high on the radar for investors who are also watching out ⁠for the impact artificial intelligence integration by corporates could have ⁠on employment. The report is due at 8:30 a.m. ET.

Overall stronger-than-expected data ​this week and a spike in crude prices have pushed back expectations for a 25-basis-point interest rate cut ​by the Federal Reserve to October from July last month, according to LSEG-compiled data.

At ‌07:07 a.m. ET, Dow E-minis were down 265 points, or 0.55%, S&P 500 E-minis were down 44.25 points, or 0.65%, and Nasdaq 100 E-minis were down 208 points, or 0.83%,

AI-chip stocks Nvidia and Advanced Micro Devices were down more than 1% each. U.S. officials are debating a new regulatory framework for exporting ⁠artificial intelligence chips, although the rules were not final.

Despite the gloomy mood, U.S. stocks have fared better than their Asian and European counterparts this week, upheld by a 1.5% rebound in technology stocks from February’s losses. ⁠The tech-heavy Nasdaq is on track ‌for small weekly gains.

Marvell Technology jumped 12% after the chip company forecast ⁠fiscal 2028 revenue above estimates.

Also supporting sentiment, the United States is perceived ​to be ‌better shielded from energy shocks as it is a net exporter of ​oil.

Energy company ⁠Occidental added 2.8% on Friday and NextDecade climbed 2.6%. Natural gas exchange traded funds gained 5.3% and 2.6%, respectively.

Meanwhile, a report said the U.S. government has declined to refund tariffs the Supreme Court ruled illegal, fueling uncertainty on the trade front.

Among others, Gap fell 8% after warning about pressure and uncertainty from U.S. import tariffs and forecasting annual adjusted profit largely below estimates.

(Reporting by Johann M Cherian and Ragini Mathur in ​Bengaluru; Editing by Devika Syamnath)