Key Market Highlights
- US stock futures (Dow, S&P 500, Nasdaq) advanced Friday morning following Thursday’s sharp decline, supported by moderating oil prices.
- Brent crude temporarily exceeded $100 per barrel for the first time since August 2022, later settling near $99.
- Analysts report the Iran situation has triggered the most significant oil supply disruption ever recorded, with the Strait of Hormuz remaining blocked.
- Bitcoin climbed above $70,000, with market observers pointing to a Trump social media message as a potential catalyst.
- Market participants now assign a 47% probability to zero Fed rate cuts in 2026, a dramatic increase from 3% one month earlier, reflecting rising inflation concerns.
Friday morning brought upward momentum to US stock futures after Thursday delivered the lowest closing values for all three major indexes in 2026. Dow Jones Industrial Average, S&P 500, and Nasdaq 100 futures each posted gains between 0.3% and 0.4% during premarket hours.
This upward movement came after an Axios report suggested optimism about potential resolution. The report indicated President Donald Trump informed fellow world leaders during a Wednesday virtual meeting that Iran appears close to capitulation. Official White House confirmation of these statements remains pending.
However, Iran’s newly appointed supreme leader, Mojtaba Khamenei, delivered a defiant message Thursday, pledging continued resistance. He reaffirmed Iran’s position on maintaining closure of the Strait of Hormuz, a vital passage for global oil transportation.
Friday marked the start of the second week of escalating tensions between Iran and Israel. Israeli forces conducted additional strikes on Tehran, while missile attacks on Dubai and Turkey appear linked to Iranian operations. The US military reported the loss of four crew members in a refueling aircraft accident.
Crude Markets Moderate After Volatile Week
Oil prices declined modestly Friday following days of intense fluctuation. West Texas Intermediate crude decreased approximately 2% to trade below $94 per barrel. Brent crude, serving as the global pricing benchmark, moved back below the $100 threshold after Thursday’s settlement marked its first close above that level since August 2022.
Market analysts characterize the current supply disruption as unprecedented in scale. The US government responded by issuing a second waiver permitting purchases of sanctioned Russian crude to alleviate supply constraints.
According to The Wall Street Journal, Indian officials confirmed active negotiations with Iran to permit passage of at least 23 oil tankers through the Strait of Hormuz. Initial crossings may occur as early as this weekend.
Federal Reserve Policy Outlook Shifts Dramatically
Inflation concerns stemming from elevated oil prices have fundamentally altered Federal Reserve policy projections. CME FedWatch data reveals traders now see a 47% likelihood of zero interest rate reductions in 2026. This represents a substantial shift from the 3% probability assigned just one month prior.
Friday morning saw the 10-year Treasury yield holding at 4.28%. The US dollar index advanced 0.3%, reaching its strongest position in 3.5 months.
Market attention centered on the pending release of the Personal Consumption Expenditures price index, the Federal Reserve’s primary inflation measure, scheduled for Friday morning. Fourth quarter GDP figures and the January JOLTS job openings report were also awaited.
Bitcoin exceeded $70,000 early Friday morning. Market analysts suggested a social media post from former President Trump may have contributed to the cryptocurrency’s upward movement. Gold appeared headed for weekly losses, pressured by dollar strength.
Thursday’s single-day jump in Brent crude represented the largest gain since May 2020, highlighting the remarkable speed of this week’s market movements.
