US Markets Retreat Amid Middle East Tensions; Oil Prices Surge While Futures Rebound

index Update

US equities pulled back from record levels on Thursday as investors assessed Iran’s response to a US-led peace proposal aimed at reopening the Strait of Hormuz and restoring global tanker movements. The Dow Jones Industrial Average declined 0.6%, retreating from the 50,000 mark, while the S&P 500 and Nasdaq slipped 0.4% and 0.1%, respectively. Market sentiment remained cautious amid rising geopolitical uncertainty and reports that the US may resume operations to safeguard commercial shipping routes in the region. Technology and semiconductor stocks faced selling pressure after recent gains, with AMD, Intel, Micron, Broadcom, and Amazon trading lower. In contrast, Fortinet rallied sharply after raising its full-year billings outlook, while Citi gained following the announcement of a USD 30 billion share repurchase program.

Market Movers

Among the top gainers, agilon health, inc. surged 117.81%, while Atara Biotherapeutics, Inc. advanced 92.82% during the session. On the losing side, Entrada Therapeutics, Inc. declined 57.27%, while Fastly, Inc. dropped 38.23%, making them the weakest-performing stocks of the day.

Commodities Update

WTI crude futures climbed above USD 95 per barrel and Brent Crude traded above USD 100 per barrel on Friday, recovering part of the week’s earlier decline as renewed clashes between the US and Iran intensified concerns over prolonged Supply disruptions. Investor sentiment remained cautious after US forces intercepted Iranian attacks and conducted defensive operations near the Strait of Hormuz, while diplomatic efforts to reopen the key shipping route remained uncertain. Additional support for crude prices came after the International Energy Agency warned that the ongoing conflict was disrupting nearly 14 million barrels per day of global oil supply, with any recovery expected to occur gradually.

Gold prices moved above USD 4,700 per ounce, while silver rose beyond USD 79 per ounce on Friday after experiencing heightened Volatility in the previous session. The rebound came as renewed US-Iran tensions weakened expectations for a near-term peace agreement and revived Inflation concerns. Despite the recovery, both precious metals remain significantly below levels seen before the conflict, as elevated energy prices and inflationary pressures strengthened expectations that major central banks may maintain tighter monetary policies.

Macro Updates

Dollar Holds Near Pre-Conflict Levels Amid Geopolitical Uncertainty

The US Dollar Index edged lower to below 98 on Friday, remaining close to levels seen before the conflict as investors continued to monitor geopolitical developments in the Middle East and awaited key US labor market data. Market Participants remained uncertain over the timing of a potential US-Iran agreement following recent military activity near the Strait of Hormuz, although President Trump reiterated that the ceasefire remains in place. Expectations that the Federal Reserve may keep interest rates unchanged for the remainder of the year limited broader currency fluctuations, while the dollar strengthened against the British pound after UK local election results increased concerns surrounding the Labour Party’s political outlook.

US Labor Market Expected to Show Slower but Resilient Growth

The US economy is projected to have added approximately 62,000 jobs in April 2026, moderating from the strong 178,000 increase recorded in March. Despite the slowdown, the data would still mark a second consecutive month of employment growth, indicating that the labor market remains resilient even as hiring gradually cools. Healthcare, social assistance, and Manufacturing sectors are expected to continue supporting Job creation, while government employment may decline. Economists forecast the Unemployment rate to remain steady at 4.3%, while average hourly Earnings are expected to rise 0.3% month-over-month, with annual wage growth accelerating to 3.8%.

Bonds Commentary

The Yield on the US 10-year Treasury note hovered near 4.39% on Friday after increasing in the previous session, as renewed tensions near the Strait of Hormuz fueled inflation concerns and reduced optimism for a swift diplomatic resolution. Investor focus also shifted toward the upcoming US employment report, which is expected to provide additional insight into labor market conditions and the future direction of Federal Reserve policy.

Futures Update

US Equity futures moved higher on Friday, with contracts linked to the S&P 500 and Nasdaq gaining 0.5% to fresh record highs, while Dow futures advanced around 150 points. Investor optimism surrounding strong corporate earnings, particularly from AI infrastructure and software companies, continued to support sentiment despite ongoing geopolitical risks. Major technology stocks including Tesla, Nvidia, and AMD traded higher in premarket activity, while expectations of resilient labor market conditions further supported futures performance. However, persistent energy inflation and geopolitical uncertainty continued to reinforce expectations of a cautious and potentially hawkish Federal Reserve stance.

U.S. stocks traded sideways early Thursday before gradually losing ground as the session progressed, with the major indexes closing modestly lower amid subdued selling pressure. The S&P 500 declined 28.01 points, or 0.38%, to finish at 7,337.10 after recovering slightly from intraday lows. From a technical perspective, the index is beginning to show signs of short-term exhaustion following its sharp rally toward the 7,400 level, while momentum indicators remain in overbought territory. A pullback toward the 7,250–7,280 support zone appears increasingly likely as sellers continue to defend the highs. Traders may want to avoid aggressively chasing upside at current levels unless the S&P 500 can reclaim the 7,385–7,400 range on strong Volume, while a break below 7,300 could open the door for a deeper move toward 7,220.