US stock futures experienced fluctuations on Sunday night due to escalating missile strikes between Israel and Iran over the weekend, which have sent ripples through global markets. Yahoo Finance reports that Dow Jones Industrial Average futures, S&P 500 futures, and Nasdaq 100 contracts hovered around the flatline. This cautious sentiment follows a sharp decline on Friday, where the Dow dropped over 700 points in a broad risk-off move.
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The geopolitical tensions have emerged at a challenging time for markets already dealing with tariff uncertainties. The previous week’s sell-off pushed major US indexes into negative territory, with the Dow ending down 1.3%, and the S&P 500 and Nasdaq Composite recording weekly losses of 0.4% and 0.6%, respectively. Gold prices also rose alongside oil, as the precious metal attracted safe-haven flows amid increasing volatility.
Crude oil prices surged at the start of trading on Sunday evening, with West Texas Intermediate futures jumping over 6% to nearly $76 a barrel before settling just under $74. Brent crude experienced a similar rise, peaking just below $78 a barrel. These movements reflect growing concerns that the Israel-Iran conflict could disrupt global energy supplies, especially after Iran hinted at possibly closing the Strait of Hormuz, a vital passage for about one-fifth of the world’s oil.
As the situation remains tense following a weekend of retaliatory strikes on energy infrastructure, markets are on high alert for the potential escalation into a broader regional crisis. Investors are also eyeing the New York Fed’s Empire State Manufacturing Survey on Monday for insights into economic strength or weakness ahead of the Federal Reserve’s interest rate decision on Wednesday. While the market largely anticipates that the Fed will maintain current rates, rising oil prices could complicate the Fed’s strategy on inflation. President Trump’s pressure on Fed Chair Jerome Powell to reduce rates may face challenges given the current market dynamics.
