U.S. futures are climbing as oil prices ease and investors await the U.S. monthly jobs report due later in the day.
Futures for the S&P 500 and Dow Jones Industrial Average both rose 0.5 per cent on Friday. Nasdaq futures gained 0.7 per cent.
Oil prices declined as the U.S. pressures Europe to release diesel reserves. On Thursday, U.S. Treasury Secretary Scott Bessent said in a post on social media platform X that the U.S.’s European partners should make deliveries of existing commitments faster and make additional supplies immediately available.
“American farmers, truckers, and businesses should not be left carrying the burden of a global diesel shortage,” he wrote. “America is doing its part. We look to our allies to match their commitments with action.”
The push on Europe comes as the U.S. sent another aircraft carrier and more troops to the Middle East, and as U.S. President Donald Trump threatened more possible escalations against Iran.
The U.S. military is deploying thousands of troops aboard a group of ships, including a third aircraft carrier, to the Middle East, according to a U.S. official on Thursday, after Trump on Wednesday threatened to “blow them up” or make a deal, referring to Iran, in an exchange with reporters.
Brent crude, the international standard, lost 2.4 per cent to below US$100 a barrel, at $99.88, after advancing on Thursday. That’s still well above the approximately $72 per barrel level in late February before the war. Benchmark U.S. crude declined 3.7 per cent to $89.47 a barrel.
Investors and traders are monitoring closely the U.S. monthly jobs report for September to be released on Friday, as the data could provide more insight into the likelihood of an October interest rate hike by the U.S. Federal Reserve, after the Fed raised rates in September for the first time in three years.
In the bond market, the yield on the 10-year U.S. Treasury was at around 5.22 per cent, after it reached 5.34 per cent on Thursday, the highest since 2002. It crossed the five per cent mark last month, as inflationary pressure from the global energy shock driven by the Iran war and rising U.S. government debt pushed investors to demand higher returns.
The five per cent level on the U.S. 10-year Treasury yield has been an “important psychological threshold” for investors, David Clewell, a portfolio manager at T. Rowe Price, said in commentary this week.
Factoring in the U.S.’s resilient economic growth, there is a “credible” likelihood that the U.S. 10-year Treasury yield can rise toward 5.5 per cent to 6 per cent, Clewell suggested. Ballooning bond yields have been putting downward pressure on stock markets, as higher borrowing costs can undercut stock returns.
In Europe, Britain’s FTSE 100 climbed 0.3 per cent. France’s CAC 40 rose 0.6 per cent, while Germany’s DAX was up 1.2 per cent. That came a day after Europe’s benchmark stock indexes fell sharply as government bond yields shot up.
Asian markets were mostly lower. Markets in mainland China were closed for a holiday.
By Chan Ho-him and Michelle Chapman