U.S. equity futures are stabilizing after Thursday’s selloff as crude retreats from above $100 per barrel and Intel’s earnings support semiconductor sentiment. Early Friday, S&P 500 futures were up about 0.2%, Dow futures gained 0.5% and Nasdaq 100 futures rose 0.1%. The Russell 2000 enters the session after a 0.7% decline Thursday and remains the weakest major index month to date. Oil’s pullback provides some relief, but elevated bond yields and questions about returns on AI capital spending continue to constrain the rebound.
U.S. equities sold off Thursday, with the S&P 500 down 1.21%, the Dow down 0.97%, the Nasdaq down 2.15% and the Russell 2000 down 0.70%.
Market internals confirmed that weakness extended beyond those two stocks. Decliners led advancers by 2.63:1 on the NYSE and 2.50:1 on the Nasdaq. Exchange volume totaled 12.49 billion shares on the NYSE and 16.27 billion on the Nasdaq, excluding regional activity.
Treasury yields rose as the oil shock and an unexpectedly strong labor-market reading reinforced tightening expectations. The 2-year yield increased 4 basis points to 4.35%, the 10-year rose 3 basis points to 4.70% and the 30-year gained 1 basis point to 5.17%. Initial jobless claims plunged to 187,000, the lowest since 1969, while continuing claims fell to 1.796 million. Seasonal auto-industry effects may have exaggerated the decline, but the data still showed limited layoffs and kept the Fed’s attention focused on inflation.
The DXY rose to 101.44 Thursday as higher yields supported the dollar. The euro weakened to $1.1380, sterling fell to $1.3320 and the dollar climbed to ¥163.82. Friday morning, the dollar remained near its July high and close to a four-decade high against the yen.
September WTI crude surged 5.49% Thursday to $91.60, while Brent settled above $100 amid attacks on Saudi tankers and continuing disruption around the Strait of Hormuz. Crude is easing Friday, with WTI near $90.70 and Brent around $98.70, but both remain headed for large weekly gains. August gold fell 2.44% to $4,050.80 as the stronger dollar and higher real yields outweighed geopolitical demand; spot gold was near $4,046 early Friday.
Friday’s calendar includes the preliminary July S&P Global manufacturing and services PMIs at 9:45 a.m. ET, followed by June new-home sales at 10:00 a.m. ET. Consensus expects new-home sales to recover to an annualized 610,000 from 580,000 in May. The housing release will be closely watched after higher mortgage rates and record prices weakened existing-home activity.
Sector Highlights
Sector performance reflected a sharp divide between defense-oriented cyclicals and megacap growth. Industrials led with a 1.77% gain, followed by Health Care +1.29%, Energy +0.56% and Utilities +0.52%. Real Estate slipped 0.07%, Financials fell 0.34%, Materials declined 0.99%, Technology lost 1.12% and Consumer Staples fell 1.14%. The steepest declines came from Communication Services -5.20% and Consumer Discretionary -5.12%, driven primarily by Alphabet and Tesla.
Information Technology
- Intel (INTC +4% premarket) reported adjusted earnings of $0.42 per share on revenue of $16.13 billion, beating estimates, and projected third-quarter revenue and profit above consensus. The company cited strong AI-driven server CPU demand and increased its 2026 capital-spending plan to $20 billion.
- Texas Instruments (TXN -3.0%) declined Thursday despite forecasting quarterly revenue above expectations, illustrating the market’s high bar for semiconductor results.
Communication Services
- Alphabet (GOOGL -7.1%) fell after raising its 2026 capital-spending forecast toward $200 billion. Search and Cloud growth remained strong, but investors focused on negative free cash flow and uncertainty over the return on AI investment.
Consumer Discretionary
- Tesla (TSLA -14.5%) tumbled after reporting negative quarterly free cash flow for the first time in more than two years as spending on AI, robotics and autonomous vehicles surged.
Industrials
- Lockheed Martin (LMT +10.5%) rallied after raising its 2026 sales and profit forecasts on stronger missile and defense-system demand.
- RTX (RTX +7.3%) also raised its outlook, citing continued strength in commercial aircraft maintenance and military systems.
Health Care
- Thermo Fisher Scientific (TMO +8.7%) advanced after beating quarterly estimates and raising its annual profit forecast, helping Health Care outperform during the broader selloff.
Financials and Utilities
- American Express (AXP) and NextEra Energy (NEE) report before Friday’s open. Card spending and credit quality will be central for American Express, while NextEra’s outlook will provide a read on power demand, renewable investment and financing costs.
