US Stock Futures Drop as Traders Eye Longer War, Options Expiry

7fyb5fe8ij9bch1312ra5}4h_media_dl_1.png BloombergArticle content(Bloomberg) — US futures extended a drop on Friday as earlier hopes for a quick resolution to the war in the Middle East faded. Meanwhile, traders braced for a historic amount of March options expiry. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentContracts on the S&P 500 Index fell 0.4% as of 7:27 a.m. in New York, while Nasdaq 100 futures declined 0.6%. Brent crude oil prices reversed earlier gains to decline 0.7% to around $108.

The Cboe Volatility Index rose to around 25. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentUS stocks are on course for a fourth week of losses — the longest losing streak in a year. The benchmark S&P 500 finished under its 200-day moving average on Thursday, a key level of the market’s overall health, which could trigger some forced selling. Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“Given recent volatility, today could almost be described as unchanged but clearly the bias has been lower,” said Sameer Samana, head of global equities and real assets at Wells Fargo Investment Institute. “I think the true test of today will be what investors decide to do at the close, before the weekend.”Article contentThe market is bracing for an increased market movement as about $5.7 trillion in notional options tied to individual stocks, indexes and exchange-traded funds were due to expire on Friday. The quarterly event that traders called “triple-witching” has a reputation for triggering unexpected price swings as large pools of derivatives exposure abruptly vanish. Friday’s tally is the largest March expiry, according to Citigroup Inc. data dating back to 1996. Article contentIran went 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. Axios reported the US is considering plans to take over Iran’s key oil-export site Kharg Island to add pressure on Tehran to reopen the Strait of Hormuz.Article contentArticle content“I think that the market is right now coming to grips with the reality that higher energy prices are going to persist longer than expected,” said Mark Malek, chief investment officer at Siebert Financial. “It is clear that the Iran regime turned to the last page in its playbook: MAD, mutually assured destruction.” Article contentCrude oil prices continued to be traders’ main concern as it affects inflation and consumer sentiment. Article contentThe latest oil future curves showed “markets are beginning to price a more persistent ‘higher for longer’ oil backdrop,” Barclays strategists including Emmanuel Cau said in a note. “This dynamic is reinforcing stagflation concerns.”Article contentOn Wednesday, Federal Reserve Chair Jerome Powell said officials will not lower interest rates until inflation cools, as it was too early to determine the impact of rising oil prices on the US economy. The central bank left rates steady for a second straight meeting. Article content“We think the Fed staying on hold remains the most appropriate positioning,” said Deborah Cunningham, chief investment officer for global liquidity markets at Federated Hermes. “The current conflict with Iran is nowhere near the magnitude of the disruptions seen during COVID, nor the 2008 global financial crisis, so there is no justification for cutting rates by hundreds of basis points.”Article contentSectors to Watch Article contentLogistics and parcel stocks C.H. Robinson and United Parcel Service rose after FedEx Corp. jumped the most in almost a year as the courier signaled the plan to restructure its delivery network is gaining traction and raised its full-year profit forecastMagnificent Seven stocks declined, set for a fourth weekly decline, as the Iran war continues to escalateArticle contentTrending Trans Mountain readies expansion in 2027 as pipeline space fills up Oil & Gas Public-private partnership launches $1.3-billion fund to purchase unsold GTA condos Real Estate Posthaste: Canada sets two new population records as 'demographic engine' backfires News Canadian housing bears now have nine reasons backing them up Mortgages Dennis, 79, is worried about a market crash. Should he move his portfolio to 100% income? Investor Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Trans Mountain readies expansion in 2027 as pipeline space fills up Oil & Gas Public-private partnership launches $1.3-billion fund to purchase unsold GTA condos Real Estate Posthaste: Canada sets two new population records as 'demographic engine' backfires News Canadian housing bears now have nine reasons backing them up Mortgages Dennis, 79, is worried about a market crash. Should he move his portfolio to 100% income? Investor