US stock index futures were mixed on Thursday as a near-7% surge in Brent crude oil reignited inflation concerns and blunted optimism from a broadly strong set of Big Tech earnings.
Investors now face a triple test: the first estimate for first-quarter GDP, March Personal Consumption Expenditures data, and continued fallout from the Federal Reserve’s most divided rate decision in more than 30 years, all in a single session.
5 things to know before Wall Street opens
1. Futures diverge as oil overshadows earnings
S&P 500 futures down were 0.22%, Nasdaq 100 futures plunged 0.23%, and Dow futures slipped 110 points, or 0.20%.
The tumble reflects that the market is caught between optimism on technology earnings and anxiety over an energy shock that is keeping the inflation outlook unsettled.
2. Brent crude surges as Iran blockade tightens
Brent crude futures advanced 6.78% to settle at $118.80 a barrel on Wednesday, extending a rally that has now carried oil to its highest level since late 2022.
Prices took a further leg higher after Axios reported that President Donald Trump had rejected Iran’s proposal to reopen the Strait of Hormuz.
The developments confirmed that the US naval blockade would remain in place until a deal addressing concerns about Iran’s nuclear programme is reached.
3. Big Tech beats, but capex guidance rattles Meta and Microsoft
Investors were most enthusiastic about Alphabet, whose shares climbed as much as 6% in after-hours trading after the company reported earnings and revenue that beat analyst expectations and raised its AI infrastructure spending target.
Amazon also rose in pre-market trading after AWS growth held above expectations.
Meta Platforms fell sharply, however, after the company raised its full-year capital expenditure guidance to between $125 billion and $145 billion, up from a prior range of $115 to $135 billion, citing expectations for higher component pricing and additional data centre costs linked to the war in Iran.
Microsoft edged lower as investors scrutinised the pace of returns on its own elevated AI spending.
4. Fed holds in most divided vote since 1992
The Federal Reserve voted 8-4 to hold the benchmark federal funds rate steady in a range of 3.5% to 3.75%, the largest number of dissents in over 30 years.
Three dissenters — Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan — opposed the retention of language signalling a bias toward easing, while a fourth dissenter, Governor Stephen Miran, voted for an immediate quarter-point cut.
In his press conference, Jerome Powell described the deliberations as reflecting “unusually difficult” conditions, citing the pandemic, Ukraine, tariffs and the Iran oil shock.
5. GDP and PCE data set to sharpen the rate outlook
Thursday’s data calendar includes the government’s first estimate for first-quarter GDP growth and March PCE prices, the Fed’s preferred inflation gauge.
Analysts expect 2.3% annualised GDP growth in the first quarter, up from 0.5% in the fourth quarter, while energy inflation is expected to lift March headline PCE by approximately 0.6%, with core PCE rising 0.3%.
Any upside surprise on inflation would reinforce the case for a prolonged pause, potentially pushing back the earliest window for any rate cut — currently seen by many strategists as no sooner than late 2026.
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