NEW YORK (CNNMoney.com) - Concerns about rising interest rates hit stock futures despite a drop in oil prices on news of the death of Abu Musab al-Zarqawi, the leader of al Qaeda in Iraq.

U.S. stock futures were down in early trading, indicating a lower open for U.S. markets after a sell-off in equities in Asia and Europe.

Oil prices were sharply lower, dropping below the $70 a barrel mark at one point in early trading on the news that an air strike near Baquba, Iraq, had killed al-Zarqawi, before recouping some of that decline.

The July light crude futures contract for NYMEX was down 79 cents to $70.03 in electronic trading, while the July contract for Brent crude lost 56 cents to $68.63.

But major markets closed lower in Asia, while major European markets also were down in early trading, on rising concerns about rising interest rates. The European Central Bank hiked its key interest rate a quarter percentage point at its meeting in Madrid Thursday, in line with forecasts of economists.

"What we're seeing here is the market basically following the meltdown in global markets," said Peter Cardillo, chief market strategist SW Bach. "The outlook of higher interest rates chasing inflation is gripping the market. It raises the questions of how much is the global economy is going to slow and what that means for corporate profits."

One thing feeding interest rates concern was a bigger than expected drop in initial jobless claims filed during the holiday-shortened week that ended June 3. There were only 302,000 seeking first-time benefits, down from the revised 337,000 the previous week and less than the forecast of 330,00. The numbers suggest a stronger than expected labor market, which could again put pressure on the Federal Reserve to keep raising rates.

Investors will be watching the testimony of Fed Governor Donald Kohn Thursday, when the Senate Banking committee considers his nomination to be vice chairman of the central bank. Friday Fed Chairman Ben Bernanke is set to give a speech at the Massachusetts Institute of Technology.

Treasury prices were higher despite the rate concerns, cutting the yield on the benchmark 10-year note to about 5.01 percent from the 5.02 percent level reached late Wednesday. But bonds were offer their high of the morning that had briefly taken the 10-year yield to 4.99 percent. The dollar was higher against the yen and the euro.

For a more detailed look at the markets before the open, click here.