U.S. equity futures pointed to a stronger start on Friday, with investors looking to rebound from the previous session’s losses after upbeat earnings from Intel and a sharp retreat in crude oil prices helped restore confidence.
The market recovery follows a difficult Thursday in which technology stocks came under heavy pressure amid rising concerns over artificial intelligence investment spending and soaring energy prices.
Intel delivers a boost for semiconductor stocks
Intel (NASDAQ:INTC) rose roughly 3% in premarket trading after posting second-quarter earnings that surpassed analysts’ expectations, supported by its fastest revenue growth in fifteen years.
The chipmaker also issued encouraging guidance for the third quarter, helping improve sentiment across the semiconductor sector after a broad technology sell-off.
Oil retreat supports broader market mood
Crude oil prices reversed sharply on Friday, with U.S. futures falling more than 3% after surging over 6% during the previous session.
The earlier rally had been triggered by attacks on oil tankers in the Red Sea, which intensified fears of potential supply disruptions.
Despite lower energy prices, geopolitical risks remained elevated as military exchanges between the United States and Iran continued to escalate.
The U.S. carried out a thirteenth consecutive night of strikes on Iranian targets, while Iran responded with missile attacks directed at neighbouring countries hosting American military installations.
Investors continue to watch trade developments
Market participants also remained focused on fresh trade measures announced by the Trump administration.
The White House introduced tariffs ranging from 10% to 12.5% on imports from 60 economies accused of failing to prevent goods produced with forced labour from entering global supply chains.
The new measures affect major trading partners including the European Union, the United Kingdom, China, India, Japan and Canada, replacing the temporary 10% tariff that expired on Friday.
Thursday’s losses were led by technology stocks
All three major U.S. indices closed lower on Thursday.
The Nasdaq dropped 2.2% to 25,137.69, the S&P 500 declined 1.2% to 7,408.30 and the Dow Jones Industrial Average lost 1.0% to finish at 51,711.65.
Tesla (NASDAQ:TSLA) plunged 14.5% after reporting disappointing quarterly earnings alongside sharply higher capital expenditure.
Alphabet (NASDAQ:GOOGL) also fell 7.1%. Although the Google parent exceeded earnings forecasts, investors reacted negatively to its increased capital spending plans.
Inflation concerns remain despite oil pullback
The previous day’s surge in crude prices had revived worries that higher energy costs could complicate the inflation outlook and delay further interest rate cuts.
Danni Hewson, Head of Financial Analysis at AJ Bell, said: “With nerves about the potential inflationary impact of the escalating conflict in the Middle East colliding with worries about soaring tech capex it’s been tough to find the optimism.”
“It’s worth remembering that at the start of the month the price was hovering around $70 a barrel and markets had dared to hope that central bankers might be able to seamlessly shift from a pause to further cuts,” she added.
Labour market remains resilient
Economic data released on Thursday showed initial unemployment claims fell to 187,000 during the week ended July 18, well below expectations of 212,000.
The reading marked the lowest level for first-time jobless claims since September 1969, highlighting continued strength in the U.S. labour market.
Airlines and retailers lagged the market
Airline shares posted some of the steepest declines, with the NYSE Arca Airline Index falling 3.3%.
American Airlines (NASDAQ:AAL) slid 8.4% after reducing its full-year earnings outlook despite reporting quarterly results above expectations.
Retail, software, telecommunications and gold-related stocks also weakened, while biotechnology, pharmaceutical and healthcare shares outperformed.
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