U.S. stock futures dropped sharply on Monday, following a spike in geopolitical tensions in the Middle East. Investors shifted out of equities and into traditional safe havens as military action in the region raised concerns over market stability.
As of 4:20 P.M. (GMT+7), Dow Jones Industrial Average futures downed by 1.25%, or 610.90 points, to 48,366.30 points, while S&P 500 futures decreased by 1.12%, or 76.80 points, to 6,802.10 points. Nasdaq 100 futures also fell by 1.51%, or 375.70 points, to 24,584.30 points.
Over the weekend, coordinated military operations by the U.S. and Israel targeted Iran, resulting in the death of Iran’s Supreme Leader and disrupting the critical Strait of Hormuz. President Donald Trump signaled ongoing military actions until specific U.S. goals are met. In response, Iran launched retaliatory attacks directed at U.S. interests across the region.
The conflict drove energy markets higher, as Iran accounts for a significant share of OPEC production. Brent crude futures surged 13% immediately after the news. As of this moment, it traded at a 8% gain around $79 per barrel. U.S. benchmark West Texas Intermediate hovered just above $72, advancing approximately 7%. Gold rallied strongly as well, surpassing $5,400 an ounce, reflecting increased demand for defensive assets.
This escalation compounds concerns for equity investors, as the market faced additional pressure at the end of last week amid worries that rapid advances in artificial intelligence could present challenges for legacy software companies.
Further uncertainty surrounds policy expectations after inflation data exceeded forecasts. Signs that businesses are passing tariff-related costs onto consumers complicated the Federal Reserve’s interest rate outlook. Investors are also awaiting Friday’s labor market report, with consensus pointing to 60,000 new jobs, below the prior month’s stronger numbers.
On the corporate front, this week’s earnings highlights will include Broadcom’s results on Wednesday, followed by Marvell Technology on Thursday. Meanwhile, Target and Costco are among the retailers set to release their earnings.
