New York, March 5, 2026, 07:49 EST
- U.S. stock futures hovered close to unchanged early Thursday, with traders eyeing the Iran conflict and keeping a wary watch on inflation risks.
- Oil tacked on more gains, weighing on hopes for rate cuts and dampening risk appetite.
- Bitcoin surged to its highest level in a month, as traders zeroed in on the crypto bill battle unfolding in Washington.
U.S. stock index futures barely budged early Thursday, with the U.S.-Israeli air campaign against Iran dragging into its sixth day and keeping traders focused on oil and inflation risks. By 05:36 a.m. ET, Dow futures slipped 0.16%, S&P 500 futures edged down 0.01%, and Nasdaq 100 futures were essentially flat. Investors eyed upcoming weekly jobless claims data and awaited new comments from Fed Vice Chair Michelle Bowman.
The tension is now playing out in the data that matter most to central bankers: inflation expectations and interest rate bets. Traders are pricing in roughly a 30.7% probability of at least a 25-basis-point rate cut in June, according to the CME FedWatch tool. That’s down sharply from last week’s 49.6%.
Tuesday saw a sharp move: stocks dropped, government bonds slid, and gold lost ground too. Oil and the dollar, though, drew buyers. “What is happening is a classic response to an event that has a lot of uncertainty,” said Michael Arone, chief investment strategist at State Street Investment Management. Reuters
Wall Street bounced higher Wednesday after The New York Times reported Iran was open to possible talks, with President Donald Trump promising moves to shore up oil markets. The Nasdaq climbed 1.29%, S&P 500 put on 0.78%, and the Dow added 0.49%. The VIX, Wall Street’s so-called “fear gauge,” dropped near 21. “That combination is giving the market some optimism,” said Jim Awad at Clearstead Advisors. Richard Bernstein noted, “the stock market will likely rally” if investors sense the war might be brief. Reuters
Gains landed unevenly. U.S. and European stocks ended the session up on Wednesday. Asia, though, took a beating—Reuters called it “hammered”—with investors left guessing if the quiet spell was genuine or simply a breather between rounds of news. Reuters
Tech names gave the market another push. Broadcom announced it expects AI chip revenue to top $100 billion by 2027, rolling out a $10 billion buyback plan that sent its shares higher and helped revive beaten-up growth stocks. CEO Hock Tan told analysts he sees a clear path to that $100 billion figure for 2027 AI chip sales. D.A. Davidson’s Gil Luria described the company’s outlook as “very encouraging.” Reuters
Oil stayed in focus as conflict kept pressure on prices. Brent crude climbed $1.72, or 2.1%, trading at $83.12 a barrel as of 1106 GMT. U.S. West Texas Intermediate advanced $1.95, or 2.6%, to $76.61. Roughly 300 oil tankers lingered in the Strait of Hormuz, where traffic was all but frozen. JPMorgan analysts flagged the risk of escalating supply losses if the passage remains shut.
The dollar edged higher again after briefly pulling back from its three-month peak. The euro slipped 0.18% to $1.1610, while the pound fell 0.1% to $1.3358. “Everyone is fumbling around in the dark,” said Nick Rees, head of macro research at Monex. For Bas van Geffen, senior macro strategist at Rabobank, it’s simple: “dollar liquidity appears to be king.” Reuters
Bitcoin jumped Wednesday, gaining roughly 8% in the past day and touching $74,000—its highest point since early February, Investopedia reported, citing data from Messari. The move followed Trump’s endorsement of the Clarity Act, legislation aimed at clarifying whether crypto assets fall under securities or commodities rules. Trump argued banks shouldn’t “hold the Clarity Act hostage.” Still, Fundstrat analyst Sean Farrell described the spike as “a rally to rent rather than own.” Investopedia
The market remains on edge. Goldman Sachs flagged “high” correction risks for global equities, citing stretched valuations and ongoing geopolitical strains. Still, the bank doesn’t see a full-blown bear market ahead. A correction means a 10% drop from a recent peak; a bear market is a 20% slide or more. Goldman pointed out that MSCI’s All Country World Index sits roughly 4% below its all-time high. Reuters
Short-term funding pressure has backed off, at least for the moment. The one-year euro cross-currency basis swap, tracking how much it costs to convert euro funding into dollars, climbed to 11.23 basis points from 10.4. That shift aligns with looser dollar liquidity. “I don’t think this should be a huge worry for investors right now,” said Michael Brown, senior research strategist at Pepperstone. Reuters
European central bankers are keeping a sharp eye on energy costs. ECB Vice President Luis de Guindos called a brief conflict his baseline scenario, but cautioned that a prolonged crisis could shift inflation expectations. Finnish central bank governor Olli Rehn echoed the caution, saying he wasn’t “overly optimistic” about a quick end. Reuters
The latest shock hasn’t shown up in U.S. data so far, though markets are quick to frame the numbers with that in mind. ISM’s services PMI jumped to 56.1 in February—highest since July 2022—but the survey wrapped up before the strikes hit. Goldman Sachs economists figure every $10 bump in oil could trim growth by about 0.1 percentage point if prices hold, while Wells Fargo’s team sees a persistent 10% oil uptick translating to roughly 0.3 percentage point more on headline inflation later this year. For February payrolls, a Reuters poll projected a 59,000 gain and unemployment flat at 4.3%.
