U.S. index futures diverged on Monday as heightened hostilities between Iran and Israel rattled investor confidence, intensifying concerns over the durability of the Middle East ceasefire. Uncertainty surrounding Federal Reserve rate moves and continued scrutiny of the artificial intelligence sector added further complexity to the market’s start for the week.
However, the downward sentiment was partially offset by investors’ enthusiasm over the market debut of Elon Musk’s SpaceX.
At 4:21 p.m. (Bangkok Time), contracts tracking the Dow Jones Industrial Average dipped 170 points, or 0.33%, while S&P 500 futures inched up 0.15% and Nasdaq 100 futures advanced 0.49%.
The mixed movements follow a turbulent close last week, characterized by a 4.18% plunge in the Nasdaq and the end of a nine-week winning stretch for the S&P 500. The reversal in sentiment stemmed from investors rotating out of semiconductor stocks into defensive sectors, after robust employment data for May fueled expectations that the Federal Reserve could tighten policy further in 2026.
Heightened geopolitical risks pushed energy prices higher. On Monday Brent crude surged to $97.17 per barrel or 4.38% gain, while West Texas Intermediate rose to $94.50 per barrel. Oil rallied after Iran’s missile strike on Israel for the first time since April, prompting retaliatory action despite President Donald Trump’s appeals for de-escalation. The renewed volatility has sparked investor fears that a fragile truce could unravel, threatening wider regional instability.
Attention in the coming days will be on significant corporate and economic events. The planned initial public offering of SpaceX, scheduled for Friday, is anticipated as one of Wall Street’s largest ever and seen as a significant gauge of investor sentiment in the AI sector.
Investors are also looking to Wednesday’s release of the Consumer Price Index, which will offer insight into whether elevated energy costs are beginning to feed through to core inflation. That will be followed on Thursday by the latest reading on the Producer Price Index, the Federal Reserve’s preferred inflation barometer. Comments from Fed officials are likely to remain focused on inflation, particularly after last week’s jobs figures highlighted a robust labor market.
Oracle is due to report earnings on Wednesday, marking another notable event for market participants.
