U.S. stock futures fell on Thursday, with Dow futures dropping 0.8 percent — about 399 points — while S&P 500 futures lost 0.5 percent and Nasdaq 100 futures shed roughly 0.6 percent. The trigger was oil: Brent crude briefly topped $105 a barrel, rising more than 4 percent to $104.60, while U.S. benchmark WTI jumped 3.9 percent to $91.70, trading above $92.20 intraday. The slide came a day after the S&P 500 and Nasdaq Composite both retreated from record highs and the Dow snapped a four-day winning streak.
Behind the oil surge is a fresh escalation in the Middle East. The United Kingdom Maritime Trade Operations center reported that a tanker was struck by multiple projectiles off the coast of Qatar, while Houthi militants stepped up attacks on Saudi Arabia. In the Gulf of Mexico, an approaching tropical storm prompted Shell and Chevron to halt production at several offshore sites. The Atlantic reported that the White House has asked the Pentagon to develop options for strikes against Iran, and the U.S. is said to be mulling a resumption of large-scale operations against Tehran. The combined supply worries pushed Brent through the $105 mark.
AI-linked stocks offered no shelter. Samsung Electronics posted a near-ninefold jump in quarterly operating profit, yet the result came in below market expectations, sending its shares down 2.4 percent and dragging Asian tech stocks lower. The Wall Street Journal reported that Oracle, Broadcom, and SpaceX are all looking to tap debt markets to fund AI investments — Broadcom alone lining up $50 billion tied to OpenAI — fueling fears of a debt race among tech giants competing for capital. In premarket trading, Nvidia dipped 0.6 percent, Broadcom eased 1.4 percent, and Micron fell 1.2 percent, extending the AI pullback.
Rising oil rekindled inflation worries and kept bonds under pressure. The 10-year Treasury yield rose to between 5.30 and 5.34 percent, edging toward 5.37 percent — a 24-year high — while the 30-year held around 5.70 to 5.715 percent, its highest since 2002. Europe sagged too, with the Stoxx 600 falling 0.65 percent to its lowest since June. "Global equity markets fell on Thursday as surging crude prices and escalating Middle East tensions reignited stagflation concerns, ending a rally that had brought major benchmarks back toward record highs," wrote Patrick Munnelly, market strategist at Tickmill Group, adding that investors are reassessing the balance between AI hype and energy-driven cost pressures.
The data picture was mixed. U.S. weekly jobless claims fell for a fifth straight week to 197,000, below economists' expectations of 200,000 — a continued "low-fire" labor market that gives the Federal Reserve cover to keep rates high. Per CME FedWatch, traders now see a 22 percent chance of a hike at the late-October meeting and an 86 percent chance of at least one hike in December. Fed Governor Christopher Waller hinted additional increases may be needed if data cooperates, though there is "flexibility" on the pace. More catalysts lie ahead tonight, including the minutes of the September FOMC meeting and the New York Fed's one-year inflation expectations — the volatility may not be over.