Wall Street Stabilizes as Investors Weigh Trade and Energy Risks

The S&P 500 and Nasdaq suffered their steepest single-day declines in a month on Thursday, as skepticism mounted regarding the profitability of aggressive capital spending in the AI sector. Intel provided a brief reprieve, with shares jumping 5% in premarket trading after the chipmaker delivered a quarterly outlook that surpassed Wall Street expectations. Meanwhile, Oracle climbed 3.2% on the news of a $7 billion, decade-long Pentagon contract to consolidate Defense Department software licenses.

Trade and geopolitical headwinds continue to test market resilience. The Trump administration has implemented new tariffs ranging from 10% to 12.5% on 60 trading partners, including China and the European Union. While these measures triggered initial concern, analysts like Brian Jacobsen of Annex Wealth Management noted the market reaction was muted, as the tariffs were largely anticipated and included strategic exemptions. Simultaneously, Brent crude remains roughly 40% higher this month, fueled by threats of military intervention in the Middle East following attacks on Saudi oil tankers in the Red Sea.

Attention now turns to the Federal Reserve. Markets are pricing in a 33% chance of an interest rate hike, with traders closely monitoring the upcoming Personal Consumption Expenditures data. Although Dow futures rose 275 points, or 0.53%, early Friday, the major indices remain on track for a difficult week, signaling a broader shift toward risk management as inflationary pressures and policy uncertainty persist.