US stock futures pulled back on Friday, while oil resumed its rally as investors weighed the odds the US might attempt to take over a key Iranian island to help unblock the Strait of Hormuz.

Contracts on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) fell 0.3% and 0.4%, respectively. Meanwhile, Nasdaq 100 futures (^IXIC) slid 0.5%, following a downbeat day on Wall Street.

Stocks are retreating as investors assess an Axios report that the Trump administration is considering plans to occupy or blockade Kharg Island, vital to Iran's oil exports. The risky operation would aim to put pressure on Tehran to reopen the Strait of Hormuz to tanker shipping.

Oil prices are being whipsawed with markets on edge for every headline in the fast-moving Middle East conflict. On Friday, Iran pressed ahead with attacks on Persian Gulf neighbors as analysts warned existing damage would keep oil prices elevated. Brent (BZ=F) futures reversed an earlier around 1% gain to trade near $108 a barrel, while West Texas Intermediate (CL=F) futures turned lower to hover above $95.

The major US stock gauges are on track for a fourth weekly decline in a row, with the Dow (^DJI) and Nasdaq Composite (^IXIC) both nearing correction territory.

Unlike their global peers, US airlines said they remain confident that record traveller demand will help offset the $11 billion spike in fuel costs caused by the Iran war. US carriers don't pre-buy fuel, and they may have to pass the rise in fuel prices directly on to passengers through higher fares.

Reuters reports:

For many airlines in ‌Europe and Asia, it is also disrupting schedules, complicating operations and clouding outlooks even as they raise surcharges or fares.

Major U.S. carriers this week pointed to resilient demand at an industry conference, with United Airlines CEO Scott Kirby saying the ​revenue environment was \\"really strong\\".

\\"We have a goal this year to fully offset the increase in fuel prices,\\" he said on Tuesday, adding fares booked over the past week were up 15% to 20% and that airlines could, for now, recover \\"100%\\" of the fuel price increase.

United has also trimmed weaker flights, such as some midweek, Saturday and overnight services as the airline would rather leave some demand unmet than keep flying routes that lose money if fuel stays high, Kirby said.

Delta Air Lines (DAL) also said it has the flexibility to cut capacity if fuel prices stay elevated.

Read more here.

Tegna (TGNA) stock rose 9% before the bell on Friday following the news that Nexstar (NXST) has completed its acquisition of Tegna, uniting two of the largest TV station ownership groups in the United States.

Reuters reports

But the deal still faces legal scrutiny: Eight state attorneys general have filed an antitrust lawsuit to block the acquisition.

The state officials, led by California Attorney General Rob Bonta, say the merger will hurt consumers by hiking prices and weakening local news coverage.

Nexstar CEO Perry Sook says otherwise: “This transaction is essential to sustaining strong local journalism in the communities we serve.”

The big broadcasting merger provoked grave concern from media watchdog groups when it was announced last August, but it was viewed as inevitable by Wall Street analysts who have forecast further consolidation in the beleaguered broadcast TV business.

Read more here.

Bloomberg reports:

Iran pressed ahead with attacks on Arab states in the Persian Gulf even after Israel signaled it would refrain from hitting the Islamic Republic’s energy infrastructure, fueling volatility in markets roiled by the war in the oil-rich region.

Kuwait shut several units at its Al Ahmadi refinery after multiple strikes. The United Arab Emirates and Saudi Arabia said they intercepted missiles and drones overnight into Friday, while Bahrain reported a fire at a warehouse.

Israel said it struck infrastructure across Iran, including in the capital Tehran, while the Islamic Republic launched a fresh wave of retaliatory missile attacks.

The fighting, which has dragged on for three weeks, has killed more than 4,200 people across the region and brought shipping through the strategic Strait of Hormuz — a chokepoint for about a fifth of global oil and LNG flows — to a near standstill. Iran’s attacks on critical energy sites have eased from a peak earlier this week, helping push oil prices lower after they hit an almost four-year high.

Still, risks of lasting damage to energy supplies remain, with Qatar saying almost a fifth of its LNG production has been knocked out for as long as five years. The fallout of the war is spreading globally, with fuel, shipping and household costs already rising.

Read more here.

Cheniere Energy, Inc. (LNG) stock rose 2% during premarket hours on Friday, following the attacks by Iran on a major Middle East liquefied natural gas hub.

Dell (DELL) stock rose more than 2% during premarket hours today. The tech company's stock is up 24% year-to-date, as the company benefits from rapid growth in its AI server business.

Unilever (UL) stock moved up 1% before the bell on Friday following the news that it's in talks to sell its food business to McCormick & Co (MKC), transforming the owner of Hellmann’s mayonnaise into a maker of beauty and personal care products in the biggest overhaul since it was founded almost a century ago.

The US has charged a Supermicro Computer (SMCI) co-founder — a US citizen — with smuggling Nvidia (NVDA)-powered servers to China, contravening restrictions on the AI technology.

California-based Supermicro is a key assembler of AI servers based on Nvidia components, and it accounts for about 9% of the chip giant's revenue, per Bloomberg.

Shares of Supermicro plunged over 20% in premarket trading after three arrests linked to the case.

Bloomberg reports:

US prosecutors charged Yih-Shyan “Wally” Liaw in a scheme to send US-assembled servers containing Nvidia’s cutting-edge chips to China in violation of US export controls. Liaw and two others associated with the company allegedly sold the AI tech through a Southeast Asia company knowing it would be sent on to China.

Also charged in the case were Ruei-Tsang “Steven” Chang, who served as a manager in the company’s Taiwan office, and Ting-Wei “Willy” Sun, an outside contractor described by US authorities as a “fixer” who allegedly aided in the diversion.

The indictment marks the biggest chip smuggling case US prosecutors have pursued since first restricting Nvidia shipments to China in 2022. It comes on the heels of several smaller-scale arrests last year, after the Trump administration pledged to crack down on violations of rules imposed to prevent China from using American AI accelerators to gain a military edge.

Read more here.

FedEx (FDX) stock rose 8% before the bell on Friday after raising its full-year outlook due to a rise in revenue and package yields in its fiscal third quarter.

The Wall Street Journal reports:

The shipping company’s main Express segment was boosted by higher revenue per package both domestically and internationally, as well as a higher volume of packages in the U.S. It also benefited from cost cutting related to the company’s ongoing turnaround plan, as it prepares to spin off its Freight business in June.

Revenue rose 8% to $24.0 billion. Analysts surveyed by FactSet forecast revenue of $23.49 billion.

The Memphis, Tenn., company shipped an average of 18.5 million packages a day, up 3% year-over-year, with the average revenue per package rising 6%.

Total U.S. package revenue jumped 10%, while international export sales were up 8%. Volume within the U.S. increased, offsetting a decline in domestic international shipping.

Read more here.

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.