Key Points
- U.S. stock futures declined as concerns about a broader Middle East conflict intensified.
- The market was reacting to news that the U.S. launched airstrikes on Iran’s nuclear sites over the weekend.
- The conflict caused oil prices to spike on fears that Iran could disrupt global supplies.
- Energy and defense stocks rose on the news, but the broader market was down.
U.S. stock futures fell on Monday morning as concerns about a broader war in the Middle East rattled investors. The drop came after Iran vowed to retaliate for American airstrikes on its nuclear facilities over the weekend, a major escalation of the conflict.
The S&P 500 stands at 5,967.85 USD, marking a slight decline of 0.22%. The Nasdaq 100 has dropped by 0.43%, settling at 21,626.39 USD, reflecting weakness in major technology and growth stocks. In contrast, the Dow Jones Industrial Average (Dow 30) showed slight resilience, inching up 0.08% to reach 42,206.83 USD.
The rising tension immediately sent oil prices jumping. Traders are concerned that Iran may attempt to close the Strait of Hormuz, a vital route for global oil supplies. The higher crude prices provided a boost to energy stocks, such as Chevron and Exxon, as well as defense companies like Lockheed Martin. However, the broader market was in the red.
This new geopolitical crisis adds another layer of concern for investors, who are already grappling with inflation worries stemming from President Donald Trump’s trade tariffs. The threat of a conflict that could disrupt oil supplies is making the economic picture even more uncertain. One market analyst noted that while there is “tension,” there isn’t yet “trauma” as investors await the next move.
In company news, Tesla’s stock rose slightly after the company launched its first self-driving taxis with paying customers in Texas. On the other hand, airline stocks like Delta and American Airlines were down.
Looking ahead, it’s a busy week for economic news. Investors will be watching for key inflation data. They will be paying close attention to Federal Reserve Chair Jerome Powell’s testimony before Congress. They will be looking for any hints on how the central bank plans to handle interest rates and the growing risks to the economy.
