US futures fall as Trump signals Iran de-escalation but oil spikes 3%
Strait of Hormuz disruptions drive crude higher, weighing on broader equities despite potential conflict wind-down
US stock futures declined Friday as President Donald Trump signaled the United States is "considering winding down" military operations in the Middle East, while disruptions in the Strait of Hormuz drove crude oil prices 3% higher and rattled investor confidence.
Dow Jones Industrial Average futures fell 231 points, or 0.5%, to 46,110. S&P 500 futures dropped 71.50 points, or 1.07%, to 6,588.50, while Nasdaq 100 futures tumbled 362.75 points, or 1.48%, to 24,217.25, according to market data reported by Benzinga.
WTI crude futures rose 2.66% to $98.09 per barrel, while gasoline futures surged 5.82% to $3.3092 per gallon and heating oil futures jumped 7.59% to $4.6715 per gallon. The price spike reflects ongoing disruptions in the Strait of Hormuz, the critical waterway through which approximately 20-25% of the world's seaborne oil trade typically transits.
Trump, posting on Truth Social, said the US is "getting very close to meeting our objectives as we consider winding down our great Military efforts in the Middle East with respect to the Terrorist Regime of Iran." However, the president explicitly rejected an immediate ceasefire, stating, "You don't do a ceasefire when you're literally obliterating the other side." He claimed Iran's military capabilities were "finished" from a strategic standpoint.
The mixed geopolitical outlook sent conflicting signals across markets. While potential de-escalation could reduce uncertainty, the continued disruptions to oil shipping through Hormuz present immediate economic risks. Higher energy prices typically weigh on corporate profits and consumer spending, creating headwinds for equities outside the energy sector.
Energy producers including Exxon Mobil and Chevron saw pre-market gains as crude prices climbed, reflecting the sector's direct benefit from elevated commodity prices. However, the broader market faced pressure from inflation concerns and the potential for sustained elevated energy costs.
The International Energy Agency has characterized the current situation as one of the largest supply disruptions in the history of the global oil market, with prices having surged from below $70 per barrel before the conflict began to around $120 per barrel at recent peaks.
Despite Trump's comments about winding down operations, reports indicate the Pentagon is deploying up to 2,500 additional Marines to the region, suggesting military operations may continue in some capacity. The disconnect between de-escalation rhetoric and ongoing military deployments added to market uncertainty.
Investors will be watching for further developments on both the geopolitical front and oil supply chain disruptions. The energy sector may continue to outperform as long as Hormuz remains constrained, but broader market sentiment hinges on whether the conflict resolution proceeds quickly or extends into a prolonged period of supply uncertainty.