US stock futures climbed early Friday morning as crude oil prices retreated sharply, offering temporary relief to markets worried about energy costs and persistent inflation. West Texas Intermediate crude fell 3% overnight amid reports that Gulf states are considering talks with Iranian officials about the Strait of Hormuz, the first such meeting since regional tensions escalated more than six months ago.
The reprieve may prove short lived. Despite the diplomatic signals, Houthi rebels have effectively seized control of key Yemeni port cities and recently struck Saudi oil infrastructure, keeping the Middle East situation volatile. Oil prices remain on track for an 8% surge since Monday alone.
S&P 500 and Nasdaq futures both gained 0.6% as of 8:00am Eastern Time, with major technology stocks leading the advance. Oracle jumped 7% in premarket trading after its artificial intelligence cloud backlog exceeded analyst estimates, while Microsoft announced plans to more than triple its data center capacity.
What will really move markets today? The answer arrives at 8:30am with August’s Consumer Price Index report, the most significant economic data before the Federal Reserve’s September 15 meeting. Bond yields edged lower by roughly 2 to 3 basis points, though they’re still hovering near three year highs. US retail sel prices have topped $6 per gallon for the first time, a reminder that inflationary pressures haven’t disappeared.
On the diplomatic front, China confirmed that President Xi Jinping and Prime Minister Narendra Modi will hold bilateral talks during the upcoming BRICS Summit in India, marking their third consecutive year of face to face engagement.
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