March 13 (Reuters) – U.S. stock index futures were subdued on Friday and Wall Street’s main indexes were set for their third week in the red, as a widening conflict in the Middle East threatened to stoke price pressures and complicate the Federal Reserve’s monetary policymaking.
Investors were also monitoring developments in the private credit market and awaiting a batch of economic data releases later in the day.
Crude prices hovered near $100 a barrel as fighting in the Middle East appeared to be far from being resolved anytime soon despite the Trump administration’s assurances on a swift end to the conflict.
Efforts such as the International Energy Agency’s record emergency oil releases and the U.S. 30-day license for countries to buy Russian oil and petroleum products stranded at sea failed to bring down the surge in costs.
“Beyond energy, what now concerns economists is the potential impact on the entire global supply chain, because what transits through the Strait of Hormuz does not stop at oil: a significant share of global industrial production indirectly depends on this corridor,” said John Plassard, head of investment strategy at Cite Gestion.
“In reality, if this situation were to persist, a large part of the global economy could quickly come under pressure.”
Markets will get an insight into the health of the U.S. economy as the January releases for durable goods and personal consumption expenditures are due at 8:30 a.m. ET, along with the second estimate of fourth-quarter gross domestic product.
Reports on job openings in January and the University of Michigan’s initial estimate on consumer sentiment in March are also expected at 10 a.m. ET.
Spiking costs have complicated the work of the Federal Reserve, which also faces a weakening jobs market. Interest-rate futures and rising short-term Treasury yields suggest hawkish monetary policy in the months ahead.
The central bank is expected to meet next week and is likely to leave interest rates unchanged. Traders now see only one 25-basis-point interest rate cut this year, according to LSEG-compiled data, compared with two before the war began on February 28.
At 5:19 a.m. ET, Dow E-minis were down 11 points, or 0.02%, and S&P 500 E-minis were down 3.5 points, or 0.05%. Nasdaq 100 E-minis were down 31.25 points, or 0.13%.
Wall Street’s fear gauge, the CBOE volatility index wavered and was last down 0.22 points at 27.05, while futures tied to the rate-sensitive Russell 2000 index were slightly lower.
The financials-heavy Dow has been hit the hardest among peers over the past three weeks, putting it on track for its biggest monthly losses since December 2024.
Credit quality worries spiked this week after Morgan Stanley halted redemptions from its private credit funds, following similar actions by BlackRock and Blue Owl in recent weeks.
JPMorgan Chase also restricted lending to private credit players, while Blackstone faced a surge in redemptions.
Blue Owl’s shares were marginally lower in premarket trading, while the others were little changed.
Travel stocks, hit the most by the war and higher energy costs, were marginally lower.
Airlines Alaska and American slipped about 0.4% each, while Carnival and Norwegian Cruise slipped about 1% each.
Design software maker Adobe
Cybersecurity firm SentinelOne
Megacap Meta
(Reporting by Johann M Cherian in Bengaluru; Editing by Maju Samuel)
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