<ul>
<li>Futures off: Dow 1.21%, S&amp;P 500 1.18%, Nasdaq 1.43%</li>
<li>Marvell Technology shares jump on strong 2028 forecast</li>
<li>Gap shares drop after warning of pressure from tariffs</li>
<li>Fed’s Waller: current oil price shock to not fuel persistent inflation</li>
</ul>
(Updates to before markets open)
By Johann M Cherian and Ragini Mathur
March 6 (Reuters) - Wall Street’s main indexes were set for a lower open on Friday as the conflict raging in the Middle East threatened to fuel inflation through higher energy costs and data showed the economy unexpectedly shed jobs in February.
A Labor Department report showed the economy lost 92,000 jobs last month, compared with estimates for a 59,000 rise. The unemployment rate rose to 4.4%, compared with expectations of 4.3%.
Following the data, traders added to expectations that the Federal Reserve will lower interest rates by 25 basis points in June, odds of which now stand at about even, up from about 35% earlier in the day, according to LSEG-compiled data. “Today’s numbers may have put the Fed between a rock and a hard place,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.
“Significant weakening in the labor market would support a rate cut, but given the risk that higher-for-longer oil prices could trigger another inflation surge, the Fed may feel compelled to remain on the sidelines.” The U.S.-Israel air campaign against Iran was nearing a week with no end in sight. Oil prices have surged the most this week since Russia’s 2022 invasion of Ukraine as shipping through the strategic Strait of Hormuz ground to a halt. Natural gas producer Qatar’s energy minister said it would take “weeks to months” to resume normal deliveries even in the case of an immediate ceasefire, according to a report, adding that he expects all Gulf energy producers to shut down exports within weeks, which could drive oil to $150 a barrel.
Crude prices edged higher and sent airlines American (AAL.O) and Delta (DAL.N) more than 3% lower in premarket trading. The S&amp;P 500’s passenger airlines subindex (.SPLRCALI) is on track for a 9% weekly drop. At 08:53 a.m. ET, Dow E-minis (YMcv1) were down 581 points, or 1.21%, S&amp;P 500 E-minis (EScv1) were down 80.5 points, or 1.18%, and Nasdaq 100 E-minis (NQcv1) were down 358 points, or 1.43%.
Wall Street’s fear gauge, the CBOE volatility index (.VIX) , spiked 3.2 points to 25.95, while futures tied to the rate-sensitive Russell 2000 index (RTYcv1) dropped 2%.
AI-chip stocks Nvidia (NVDA.O) and Advanced Micro Devices (AMD.O) were down about 2% each. U.S. officials are debating a new regulatory framework for exporting artificial intelligence chips, although the rules were not final.
Despite the gloomy mood, U.S. stocks have fared better than their Asian and European counterparts this week, upheld by a 1.5% rebound in technology stocks (.SPLRCT) from February’s losses. The tech-heavy Nasdaq (.IXIC) is on track for small weekly gains. Marvell Technology (MRVL.O) jumped 10% after the chip company forecast fiscal 2028 revenue above estimates.
Also supporting sentiment, the United States is perceived to be better shielded from energy shocks as it is a net exporter of oil. Federal Reserve Governor Christopher Waller said on Bloomberg Television that he does not expect the global jump in oil prices to lead to persistent inflation or warrant a change in monetary policy.
Energy companies Occidental (OXY.N) and NextDecade (NEXT.O) climbed more than 2% each on Friday. Natural gas exchange traded funds (BOIL.P) (UNG.P) gained 8% and 4%, respectively. Meanwhile, a report said the U.S. government has declined to refund tariffs the Supreme Court ruled illegal, fueling uncertainty on the trade front. Among others, Gap (GAP.N) fell 9% after warning about pressure and uncertainty from U.S. import tariffs and forecasting annual adjusted profit largely below estimates.

- Wall Street's main indexes were set to open lower due to an unexpected job loss of 92,000 in February, raising concerns about inflation from increased energy costs amid ongoing Middle Eastern conflicts.  
- Futures for Dow, S&P 500, and Nasdaq dropped by 1.21%, 1.18%, and 1.43%, respectively, while Marvell Technology's shares surged 10% on a positive revenue forecast.  
- In contrast, Gap's shares fell 9% after issuing a warning about tariffs affecting profits, and Fed Governor Waller indicated that current oil price increases are not expected to trigger persistent inflation.

Reuters

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US STOCKS-Wall St set for lower open as Middle East turmoil, weak jobs report weigh