U.S. equity futures moved higher on Friday morning after a recovery among chipmakers helped offset geopolitical jitters stemming from clashes between U.S. and Iranian forces in the Gulf. By 06:04 a.m. ET, Dow E-minis were up 128 points, or 0.26%. S&P 500 E-minis gained 33.25 points, or 0.45%, while Nasdaq 100 E-minis added 180.5 points, or 0.63%, with the latter two trading close to record highs.
The advance in futures followed a session in which U.S. stocks closed lower as investors paused on semiconductor names that have rallied strongly this year amid heavy spending on artificial-intelligence infrastructure. On Friday, semiconductor shares steadied and led gains in the premarket. Microchip Technology rose 3.9% after it forecast first-quarter revenue above estimates, citing robust demand for chips used in industrial and automotive applications. Qualcomm jumped 4.8%, and Nvidia was up 1%.
Those moves helped partly offset market pressure from a renewed escalation in the Gulf, where U.S. and Iranian forces clashed. The confrontation dampened hopes of a quick resolution to broader Middle East tensions and reduced prospects for a prompt reopening of the Strait of Hormuz - a strategic corridor for oil and liquefied natural gas shipments. Oil prices climbed above $100 a barrel.
"The clock is ticking, as we need to see oil flows resuming sooner rather than later," Barclays strategist Emmanuel Cau wrote in a note. He added that the semiconductor trade may be looking extended, and that broader market breadth and a sustained equity melt-up hinge on tangible progress toward reopening the Strait of Hormuz.
Despite concerns that higher oil prices could stoke inflation, both the S&P 500 and the Nasdaq have reached record highs recently, helped by a solid earnings season, signs of a resilient U.S. economy and optimism about the outlook for technology and AI-related companies.
Jobs test and policy implications
Attention is focused on the Labor Department's employment report, due at 8:30 a.m. ET. A Reuters poll of economists forecasts nonfarm payrolls rose by 62,000 jobs in the latest month, following a 178,000 gain in March. The unemployment rate is expected to hold at 4.3%, a signal of labor market stability consistent with recent economic data.
"With inflationary concerns running high, a strong print could move expectations for rate cuts further out yet," said Derren Nathan, head of equity research at Hargreaves Lansdown. Money market futures imply traders expect the U.S. Federal Reserve to keep interest rates unchanged in the 3.50% to 3.75% range through the end of the year.
Other early movers
Not all premarket action was positive. Cloudflare shares plunged 17% after the cloud services firm said it would reduce its workforce by about 20% and forecast second-quarter revenue slightly below Wall Street expectations. The Trade Desk fell 15.8% after the ad-technology company issued second-quarter revenue guidance below analysts' estimates. CoreWeave slid 6.5% after the cloud infrastructure technology provider raised the lower end of its annual capital-expenditure forecast, attributing the change to higher component prices.
Overall, futures trading suggested cautious optimism as semiconductor gains provided support, while geopolitical friction and elevated oil prices remained key sources of market uncertainty heading into a pivotal jobs release.