U.S. Stock Futures Steady as Wall Street Retreats on Oil Volatility and Fed Rate Outlook

U.S. stock index futures showed minimal movement on Thursday evening following a rough session on Wall Street, where all three major indexes closed in the red amid sharp swings in oil prices and growing uncertainty around Federal Reserve monetary policy.

S&P 500 Futures edged up 0.1% to 6,669.0, Nasdaq 100 Futures rose 0.1% to 24,600.25, and Dow Jones Futures gained 0.2% to 46,424.0 as of 8:10 PM ET. These modest after-hours gains came after the Dow Jones Industrial Average dropped 0.4% during the regular session, while both the S&P 500 and Nasdaq Composite each declined approximately 0.3%.

A dramatic intraday surge in Brent crude oil to nearly $119 per barrel rattled investor confidence, with escalating tensions in the Middle East raising fears over global energy supply. The spike stoked concerns about renewed inflationary pressure, though prices retreated before the close. Some relief came after Israeli Prime Minister Benjamin Netanyahu confirmed Israel was supporting U.S. efforts to reopen the Strait of Hormuz, a vital oil shipping corridor. President Donald Trump also urged Israel to halt further strikes on Iranian gas infrastructure, helping to ease supply disruption fears.

Adding to market pressure, the Federal Reserve held interest rates steady on Wednesday, with Chair Jerome Powell cautioning that elevated oil prices could complicate the central bank's efforts to bring inflation under control. The Fed's cautious tone reinforced a hawkish outlook among investors, who have now drastically scaled back expectations for near-term rate cuts. According to the CME FedWatch tool, markets are pricing in little to no chance of a rate reduction before mid-2027, cementing a "higher-for-longer" interest rate environment that continues to weigh on risk appetite across equity markets.