US stock futures dropped sharply Monday amid heightened fears of a broader Middle East conflict, as hostilities between Iran and Trump’s administration escalated. Investors grew increasingly cautious as threats traded over the weekend propelled concerns of further global economic disruption.
At 4:29 p.m. (Bangkok Time), futures tied to the Dow Jones Industrial Average fell by 221 points, marking a decline of 0.48%. Contracts on the S&P 500 dropped 0.62%, while Nasdaq 100 futures slipped by 0.69%. The volatile start to the trading week comes as ongoing tensions in the Middle East threaten to push the crisis into its fourth week with no sign of easing.
Market nervousness accelerated after an escalated exchange of military threats occurred between Washington and Tehran. Over the weekend, President Donald Trump signaled that U.S. forces would strike the Iranian energy grid should Iran keep the Strait of Hormuz closed past a two-day deadline. By Monday, Iranian forces had launched new attacks, following previous pledges to respond to U.S. warnings.
The unrest in the region has fueled a surge in oil prices, adding inflationary pressure and raising worries about broader market fallout. On Monday, West Texas Intermediate crude climbed 0.71% to $98.93 a barrel, while Brent crude rose 2.23% to $108.78. Concerns continue to grow over the potential impact on the Federal Reserve’s inflation projections and the wider economy.
As inflation pressures build, gold prices have come under renewed pressure. Futures for gold reversed their year-to-date advance with a 6.09% decrease on Monday, reflecting investor concerns that the Federal Reserve may choose to maintain its current interest rate stance rather than implement cuts.
Tuesday will see the release of S&P Global’s Flash U.S. PMI report, offering further insight into U.S. economic conditions as volatility persists.
