FX.co ★ US Futures Fall Further to YTD Lows

US equity futures fell to their lowest level of the year on Thursday as surging energy prices renewed stagflation concerns for the global economy. Futures tied to the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 were all down roughly 0.8%.

A decision by the International Energy Agency to release 400 million barrels of oil from strategic reserves did little to stem another sharp rally in crude and refined product prices. Geopolitical tensions escalated as strikes between Iran, Israel, and members of the Gulf Cooperation Council intensified, while tankers increasingly avoided transiting the Strait of Hormuz.

US Treasury yields continued to climb across the curve, reflecting the impact of higher energy costs and lower-than-expected jobless claims. The resulting rise in borrowing costs added pressure on credit-sensitive sectors.

Financial stocks stayed under heightened scrutiny after Morgan Stanley and Cliffwater became the latest firms to limit withdrawals from private credit funds, fueling worries about deteriorating loan quality. Shares of Morgan Stanley, Bank of America, and JPMorgan each fell more than 2% in premarket trading.

Elsewhere, Adobe traded just below the flat line ahead of its earnings release.