Oil Price Surge and Middle Eastern Tensions Shake U.S. Markets

U.S. stock index futures declined amid rising oil prices fueled by Middle Eastern conflicts, which heightened inflation concerns. Goldman Sachs delayed interest rate cut forecasts as crude prices soared. Meanwhile, U.S. reopened trade probes, and the private credit market faced scrutiny due to potential vulnerabilities.

On Thursday, U.S. stock index futures fell as oil prices skyrocketed above $100 a barrel, intensifying inflation concerns and leading traders to reduce expectations for U.S. interest rate cuts.

The surge in crude prices followed reports of two tankers set ablaze in Iraqi waters by Iranian strikes, amid a broader wave of conflicts impacting oil and transport facilities in the Middle East. Iran threatened that oil prices could reach $200 a barrel. In response, Goldman Sachs postponed its anticipated timing for the Federal Reserve's next rate cut to September, revising from an earlier June expectation. Money market futures now suggest only one quarter-point cut by December, compared to two previously expected.

This month's global markets have been perturbed as conflicts involving the U.S. and Israel with Iran impaired oil supplies, driving crude prices higher and complicating central banks' monetary policy plans. Additionally, the U.S. began new trade investigations following the Supreme Court's dismantling of significant portions of former President Trump's tariff program.

(With inputs from agencies.)