TLDR
- Equity futures (Dow, S&P 500, Nasdaq) gained ground Friday morning following Thursday’s sharp decline, benefiting from a modest retreat in crude oil prices.
- Brent crude temporarily surpassed $100 per barrel—the first time since August 2022—before falling back to approximately $99.
- The Middle East crisis, entering its second week, has triggered what analysts call the most significant oil supply disruption ever recorded, with the Strait of Hormuz remaining blocked.
- Bitcoin jumped beyond $70,000, with market observers pointing to a Trump social media message as a potential catalyst for the cryptocurrency surge.
- Market participants now assign a 47% probability that the Federal Reserve will maintain current interest rates throughout 2026, a dramatic increase from 3% just one month earlier, reflecting heightened inflation concerns.
Equity futures posted gains Friday morning, recovering from Thursday’s brutal session that pushed all three major indices to their 2026 lows. Dow Jones Industrial Average, S&P 500, and Nasdaq 100 futures each advanced between 0.3% and 0.4% during premarket hours.
The upward movement came after an Axios report suggested positive developments. According to the outlet, President Donald Trump informed international leaders during a Wednesday virtual summit that Iran is “about to surrender.” Official White House confirmation of these statements has not been provided.
However, contradicting that narrative, Iran’s newly appointed supreme leader, Mojtaba Khamenei, pledged on Thursday to continue military operations. He additionally confirmed Iran’s intention to maintain the closure of the Strait of Hormuz, a waterway essential for global oil transportation.
The Iranian-Israeli confrontation reached its second week Friday. Israeli forces conducted additional strikes on Tehran, while Iran is suspected of involvement in missile attacks targeting Dubai and Turkish territory. The US military also reported the deaths of four service members in a refueling aircraft accident.
Crude Prices Decline But Remain Near Highs
Oil prices experienced a modest decline Friday after significant volatility throughout the week. West Texas Intermediate crude decreased roughly 2% to trade below $94 per barrel. Brent crude, the global pricing benchmark, dropped back under the $100 threshold after closing above that psychologically significant level Thursday for the first time in over two and a half years.
Industry analysts have characterized the current oil supply disruption as unprecedented in scale. To mitigate supply constraints, the US government issued a second exemption permitting purchases of sanctioned Russian crude oil.
According to The Wall Street Journal, citing Indian government sources, India is conducting intensive negotiations with Iran to secure passage for at least 23 oil tankers through the Strait of Hormuz. Initial transits could potentially occur by weekend’s end.
Federal Reserve Rate Cut Expectations Plummet
Inflationary pressures stemming from elevated oil prices are dramatically altering Federal Reserve policy forecasts. CME FedWatch data indicates traders now see a 47% likelihood that the Fed will implement zero rate cuts throughout 2026, a substantial jump from merely 3% one month prior.
The 10-year Treasury yield stood at 4.28% Friday morning. The US dollar index climbed 0.3%, reaching a 3.5-month peak.
Market attention was focused on the Personal Consumption Expenditures price index, scheduled for Friday morning release, which serves as the Federal Reserve’s primary inflation metric. Fourth quarter GDP figures and the January JOLTS job openings report were also on the economic calendar.
Bitcoin broke through the $70,000 threshold early Friday. Some market analysts attributed the cryptocurrency’s momentum to a social media message posted by former President Trump. Gold was positioned for a weekly decline, pressured by dollar strength.
Thursday witnessed Brent crude’s most substantial single-session percentage gain since May 2020, highlighting the extraordinary market volatility experienced this week.
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