US stock futures slipped on Friday, setting up for weekly losses as oil turned higher amid continued worries tied to the US-Israeli war with Iran.

Contracts on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both hovered just above the flat line. Meanwhile futures on the tech-heavy Nasdaq 100 (^IXIC) nudged 0.1% lower, eyeing another downbeat day after stocks on Wall Street closed lower on Thursday.

The major US gauges are on track for a fourth weekly decline in a row, bruised by a surge in oil prices as the Middle East conflict escalated. Both the Dow (^DJI) and Nasdaq Composite (^IXIC) are approaching correction territory, at around 8% below recent record highs. The S&P 500 (^GSPC) is about 5% off its peak.

Crude prices reversed course to resume their rally, shaking off US and Israel's bid to calm nerves about hits to key Middle East energy hubs. On Friday, Iran pressed ahead with attacks on Persian Gulf neighbors in the face of Israel's pledge to spare energy sites. Analysts warned that oil prices will stay high, given existing damage. Brent (BZ=F) futures rose 1.2% to top $109 a barrel, while West Texas Intermediate (CL=F) futures were slightly higher at above $96.

While the Fed signaled one cut could still be on the table this year, investors are expecting rates to remain as they are, following comments from Chair Jerome Powell.

On the corporate front, earnings season is mostly wrapped for the quarter. Next week sees GameStop (GME) and Carnival (CCL) issue reports.

From Bloomberg:

Wall Street equities traders are bracing for an unusually large tally of options expiring on Friday, which risks injecting even more volatility into a market that’s seen weeks of turbulence amid the raging Mideast conflict.

Roughly $5.7 trillion in notional options tied to individual US stocks, indexes and exchange-traded funds are set to expire on Friday in the quarterly event that traders have dubbed the “triple-witching” — the largest March expiry in Citigroup Inc. data going back to 1996. That figure includes $4.1 trillion in index contracts, $772 billion in exchange-traded funds and $875 billion in single-stock options.

The event, which forces traders to close, roll or rebalance positions, has long carried a reputation for triggering abrupt price swings as large pools of derivatives exposure suddenly vanish.

This quarter’s expiration arrives at a particularly fraught moment for markets, with bets on Federal Reserve interest-rate cuts fading as the Iran war has sparked a rally in crude prices and concerns over inflation. Hostilities continued on Thursday amid escalating attacks in the Persian Gulf on energy facilities.

While the S&P 500 Index (^GSPC) is only about 6% below its January record, the Cboe Volatility Index — a key gauge of expected equity swings — is well above its six-month average, underscoring lingering investor angst.

Read more here.

Bloomberg reports:

Alibaba Group Holding Ltd. (BABA) aims to quintuple cloud and AI revenue to $100 billion annually in five years, setting a high bar for its artificial intelligence endeavors to offset the plateauing of a once pre-eminent e-commerce empire.

Chief Executive Officer Eddie Wu proclaimed that goal after his company reported a 67% plunge in quarterly earnings and meagre revenue growth, underscoring the urgency behind Alibaba’s drive to wring more cash out of costly AI endeavors. But Wu didn’t offer specifics on how his company would hit that objective, which suggests at least 35% growth a year — about matching the pace that the cloud division managed in the December quarter. Alibaba’s US-listed shares slid 7.1%, the biggest drop since October.

The picture across most other units appeared bleaker. The company posted a 2% rise in sales to 284.8 billion yuan ($41.3 billion) for the three months ended December, just shy of the average projection. Net income plummeted — its worst performance since early 2024 — hurt in part by heavy spending on promotions to fend off rivals in commerce.

Read more here.

Bloomberg reports:

Gold (GC=F) headed for the biggest weekly loss in six years, as war in the Middle East boosted energy and reduced expectations for rate cuts.

Bullion traded near $4,640 an ounce on Friday, down almost 8% this week, the most since March 2020. Soaring crude, natural gas and fuel prices triggered by the conflict are raising inflation concerns, reducing prospects of central banks lowering borrowing costs. That hurts gold as it doesn’t pay interest.

The precious metal — widely viewed as a haven — has dropped every week since the US and Israel attacked Iran last month. The retreat has come as Treasury yields and the US dollar gained ground, investors sold bullion to cover losses elsewhere, and gold-backed exchange-traded funds posted outflows.

Read more here.