US stock futures moved higher in early trading on Friday, with optimism over a possible phased reopening of the Strait of Hormuz adding to gains from softer oil prices and strength across Asian markets.
Nasdaq-100 futures were up 0.56% at 30,940.50, while E-mini S&P 500 futures gained 0.28% to 7,788.75. The moves came after the S&P 500 and Nasdaq Composite ended Thursday’s session broadly flat.
Three Reasons Behind The Pre-Market Move
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Hormuz reopening hopes: Overnight reports indicated that Washington and Tehran were exploring a phased framework to reopen the strategic Strait of Hormuz. The reports, cited by market coverage including Yahoo Finance, suggested Iran could reopen the waterway as part of a broader arrangement involving the lifting of US economic restrictions.
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The reports triggered a late-session rebound on Wall Street, although Iran has publicly denied that formal negotiations are underway. Investors remain focused on whether any diplomatic development translates into an actual improvement in tanker flows through the waterway.
Cooling oil prices: Hopes of progress on Hormuz helped pull crude prices back from recent highs, easing some of the immediate inflation concerns linked to the Iran conflict. Lower energy prices could reduce pressure on consumers and businesses and ease concerns around the US interest-rate outlook.
Asian equities: Gains across parts of Asia also provided a positive cue for US futures. Japan’s Nikkei 225 closed 1.3% higher, while Australia’s S&P/ASX 200 declined 0.43%. Hong Kong’s Hang Seng was down 1.21% in the final hour of trading. Mainland Chinese and South Korean markets were shut for holidays.
The rise in equities comes against a backdrop of sharply higher US Treasury yields. The 10-year Treasury yield climbed to 5.225% late Thursday, its highest level since 2007, while the 30-year yield touched 5.502%.
Higher yields have been driven by hawkish comments from Federal Reserve Governor Michael Barr, elevated energy prices linked to the Iran war and a stronger-than-expected purchasing managers’ report, according to the market commentary provided.
CME FedWatch data cited in the report showed traders pricing in roughly a 68% probability of a rate hike in October.
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