U.S. stock futures edge higher as oil eases on Russian export waiver

U.S. issues 30-day license for Russian oil as markets seek stability

The U.S. Treasury on Thursday evening issued a 30-day license permitting countries to buy Russian oil and petroleum products that are already at sea. The measure was aimed at stabilizing energy markets amid the ongoing conflict, which has contributed to disruptions in global oil supplies.

In Asian trading on Friday, oil prices fell following the announcement but later trimmed a substantial portion of their initial losses. Market participants remained focused on risks linked to the Iran war, which continued to overshadow the impact of the Russian oil waiver on overall supply expectations.

Brent crude had surged above $100 per barrel on Thursday for the first time since August 2022, after Iran's new Supreme Leader Mojtaba Khamenei threatened to keep the Strait of Hormuz closed. Goldman Sachs raised its average Brent oil price forecast to over $100 a barrel for March and $85 in April, reflecting the elevated price environment.

Equities, dollar and volatility react ahead of PCE data

U.S. stock futures moved higher on Thursday evening, reversing part of the prior session’s losses. Futures for the Dow Jones Industrial Average rose 0.27%, S&P 500 futures advanced 0.21%, and Nasdaq 100 futures added 0.12%.

The gains in futures followed a sharp sell-off in cash trading on Thursday. The Dow Jones Industrial Average fell nearly 740 points, closing below 47,000 for the first time this year. The S&P 500 dropped 1.5% to 6,672.62, while the Nasdaq Composite declined 1.8% to 22,311.98. The VIX volatility index stood at 27.29, indicating elevated market uncertainty.

The dollar strengthened to more than a three-month high on Friday and was poised for a second consecutive weekly gain as the Iran war showed no signs of ending. Investors are also awaiting the release of PCE inflation data due Friday, with economists forecasting a 2.9% year-on-year increase, a key input for market expectations on the U.S. economic and policy outlook.

FAQ

What did the U.S. Treasury announce regarding Russian oil?
The U.S. Treasury issued a 30-day license allowing countries to buy Russian oil and petroleum products that are already at sea, with the stated aim of stabilizing energy markets during the ongoing conflict.

How did oil prices react to the new license?
Oil prices fell in Asian trade on Friday following the announcement but later trimmed much of their initial losses, as concerns over supply disruptions from the Iran war continued to dominate market sentiment.

How did U.S. stock futures and major indices perform?
On Thursday evening, Dow Jones futures rose 0.27%, S&P 500 futures gained 0.21%, and Nasdaq 100 futures increased 0.12%. Earlier on Thursday, the Dow fell nearly 740 points, the S&P 500 declined 1.5% to 6,672.62, and the Nasdaq Composite dropped 1.8% to 22,311.98.

What is the market expecting from the upcoming PCE inflation data?
Economists are forecasting a 2.9% year-on-year rise in PCE inflation, a figure that markets are monitoring closely for its implications for the U.S. economic outlook.