Stock futures dipped and oil prices rose in overnight trading after an Israeli missile struck Iran following Iran's retaliatory attack on the country last weekend.
Investors are closely watching conflicts in the Middle East for signs that escalating hostilities between Israel and Iran threaten global oil supplies and drive up energy prices.
Crude prices, which rose to their highest level in months after Iran's drone and missile attack on Israel on April 13, rose above $90 early Friday before relinquishing those gains amid signs that the Iranian government was downplaying the impact of the Israeli attack.
Stock futures on the S&P 500 fell 0.6%, while the Dow Jones Industrial Average and Nasdaq Composite index declined 0.5% and 0.7%, respectively.
"While geopolitics is going to stay a presence in this market for a while ... we think the events of the last 12 hours in Iran are encouraging, as they will help cool tensions between Israel and Tehran, at least for the time being," Adam Crisafulli of Vital Knowledge said in a note to investors.
During oil trading, the U.S. benchmark crude saw a rise of 11 cents, reaching $82.22 per barrel in electronic trading on the New York Mercantile Exchange. Meanwhile, Brent crude, the international standard, increased by 7 cents to $87.18 per barrel.
Various factors have contributed to the increase in gasoline prices in the U.S. over the past month. The national average for a gallon of regular gasoline now stands at $3.67, which is 21 cents higher than a month ago, as reported by AAA. Typically, fuel costs rise during this period as more drivers take to the roads and oil refineries conduct maintenance during milder weather, leading to potential supply constraints.
Despite concerns among oil investors due to conflicts in the Middle East and Ukraine, AAA does not anticipate a significant spike in domestic gas prices at the moment. The organization highlights a decrease in fuel demand following the conclusion of spring breaks across the U.S. leading up to the Memorial Day holiday.
