U.S. stock futures drift higher as oil drop offers some relief

Investing.com-- U.S. stock index futures turned mildly positive early-Friday as a sharp drop in oil prices offered some relief after a surge in crude and Treasury yields spooked Wall Street this week.

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Positive rhetoric on artificial intelligence and trade from a recent U.S.-China summit also aided sentiment, although more details on the results of the talks were still awaited.

Concerns over AI funding swirled on a report of Oracle declaring force majeure at a major data center project, although gains in Meta helped offset this.

S&P 500 Futures rose 0.12% to 7,776.0 points by 02:58 ET (06:58 GMT). Nasdaq 100 Futures rose 0.3% 30,870.50 points, while Dow Jones Futures rose 0.1% to 51,788.0 points.

Futures were encouraged by a sharp drop in oil prices, after reports said the U.S. and Iran were seeking a deal to reopen the Strait of Hormuz. But hostilities in the Middle East-- especially between Saudi Arabia and the Houthis-- persisted.

Trump and Xi concluded their bilateral talks in Washington on Thursday, with the Chinese president seen attending a state dinner at the White House.

Trump said he had a "great meeting" with Xi, while China's Ministry of Foreign Affairs described Xi's visit to the U.S. as a "great visit."

Xi, in his address at the state dinner, said China and the U.S. stood to benefit more from cooperation than competition in AI. He also said the two countries had "reached a common understanding on many issues."

But few clear details on the discussions were immediately clear.

Going into Thursday's talks, Washington and Beijing had agreed to extend their ongoing trade truce by two months to early-January, leaving a limited window for the world's largest economies to hash out a lasting trade deal

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Wall Street indexes closed flat following a whipsaw session on Thursday.

Risk sentiment was rattled by Treasury yields rising further, with the 10-year rate crossing 5.2% and briefly hitting a fresh 19-year high.

Yields rose amid growing anxiety over more interest rate hikes by the Federal Reserve, with several officials warning this week that the central bank will likely hike further in the face of increasingly sticky inflation.

Soaring oil prices added to concerns over inflation, with crude rising sharply after a Houthi missile attack on Saudi Arabia. But separately, Reuters reported the U.S. and Iran discussed a phased deal to reopen the Strait of Hormuz, spurring some hopes for a de-escalation in the Middle East conflict.

Meta Platforms Inc (NASDAQ:META) was a standout performer, surging 4.5% after the social media company unveiled a host of new AI smart glasses, while also outlining more features for its breakout Muse agent.

Oracle Corporation (NYSE:ORCL) fell more than 3% on Thursday after Bloomberg reported the company had issued a force majeure notice to the developer of its massive artificial intelligence data center in New Mexico.

The center is being developed by a unit of Blue Owl Capital Inc (NYSE:OWL), whose shares fell 3%.

The report said Oracle had made the declaration over delays in securing power for the project. The company is also attempting to delay payments on the center– dubbed Project Jupiter– should it fail to come online by 2028 as planned.

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