Surging oil unnerves investors

LONDON (CNNMoney.com) -- U.S. stocks are likely to trade lower Thursday, with oil prices hovering near $80 a barrel and the dollar near an all-time low versus the euro.

At 4:32 a.m. ET, Nasdaq and S&P futures were lower, with a comparison to fair value pointing to slight declines at the market open.

Crude prices ended at another record close of $79.91 a barrel on Wednesday after hitting a trading high of $80.18 during the session.

The rise in oil prices, which could place upward pressure on inflation, comes as pressure is growing on the Federal Reserve to aggressively lower its short-term interest rate in a bid to restore confidence in the financial markets.

The dollar also hit a fresh record low against the euro on Wednesday amid growing expectations that the Fed will cut interest rates at its meeting on Sept. 18.

Oil prices retreated slightly early Thursday, and the dollar edged higher against the euro.

Volatility in the stock market is expected to increase ahead of that meeting next week. Traders are widely expecting the Fed to lower its short-term interest rate by a quarter-percentage point, and some are calling for a bigger, half-percentage point cut. The fed funds rate currently stands at 5.25 percent.

In global markets, Asian markets gained. Japanese stocks were mixed, however, in the wake of Prime Minister Shinzo Abe's resignation. European markets were mostly lower in early trading.

In major corporate news, McDonald's (Charts, Fortune 500) said late Wednesday it was raising its annual cash dividend 50 percent to $1.50 a share. The announcement came a day after the fast food retailer posted a jump in same-store sales in August.