Fueling Inflation: Rising Crude Prices, Middle East Conflict & Fed's Cautious Stance

U.S. stock futures slipped as crude prices surged following Middle East hostilities, raising inflation fears and causing the Federal Reserve to maintain caution on interest rate cuts. Despite Micron Technology's strong forecast, chip stocks declined amid concerns over spending and elevated borrowing costs. Investors now predict delayed rate reductions.

On Thursday, U.S. stock index futures fell as escalating tensions in the Middle East led to soaring crude prices, stoking inflation worries. This has driven the Federal Reserve to proceed cautiously on interest rate cuts this year.

Despite a robust outlook from Micron Technology, investor sentiment remained subdued as the chip manufacturer faced scrutiny over increased expenditure plans amid higher borrowing costs. Other memory chip stocks also declined, with SanDisk, Western Digital, and Nvidia experiencing reductions in premarket trading.

Crude oil prices surged, with Brent reaching $115 per barrel following Iran's retaliatory strikes on Middle East energy facilities. The Federal Reserve, keeping rates unchanged, forecasted persistent inflation, with prominent banks adjusting their rate cut projections. Meanwhile, U.S. markets await further insights from policymakers and economic reports.

(With inputs from agencies.)