Nasdaq futures pull U.S. stocks lower as oil rebounds

Nasdaq futures fell 0.6% Friday morning, dragging S&P 500 futures down 0.5% and Dow Jones futures down 0.4%, after Brent crude rose to $110.21 following earlier losses.

In pre-market trading, Brent had dipped to about $107 a barrel before climbing back to $110.21. West Texas Intermediate futures traded near $95.13. Traders cited renewed concern over Iranian attacks on energy infrastructure and cautious comments from officials as factors lifting oil prices and weighing on risk assets.

A brief pullback in risk aversion came Thursday after Israeli Prime Minister Benjamin Netanyahu suggested Israel could assist the U.S. in reopening the Strait of Hormuz and said the conflict might end sooner than expected. Those remarks pushed Brent down as much as 2% and helped lift Wall Street off its lows.

Neil Wilson, investor strategist at Saxo UK, commented that the selloff in risk assets has been uneven and described the pattern as ‘non-linear.' He noted markets are beginning to price a longer conflict horizon and a slow restoration of energy flows, which could affect inflation expectations.

Saad al-Kaabi, chief executive of QatarEnergy, warned Iranian attacks could remove about 17% of Qatar’s Ras Laffan LNG capacity for three to five years, raising concerns about tighter global gas supplies.

European stock indices showed a mixed response. London's FTSE 100 recovered from early weakness and traded about 0.2% higher by midday in the U.K., while Frankfurt's DAX slipped 0.1% and the Paris CAC 40 was marginally up.

Market participants said they will monitor further diplomatic exchanges and any new intelligence on attacks to assess how long higher energy prices may persist and the potential effects on corporate earnings and inflation readings.