Stock Futures Rise Despite Geopolitical Tensions Amid Escalating Israel-Iran Conflict

 

 

U.S. stock futures edged higher early

Monday, even as rising geopolitical tensions between Israel and Iran pushed oil prices upward and fueled concerns about the global economy.

Dow Jones Industrial Average futures climbed 63 points, or 0.15%, while S&P 500 futures rose by 0.24%. Meanwhile, Nasdaq 100 futures advanced 0.36%, reflecting cautious optimism among investors.

Crude oil markets reacted sharply to the Middle East developments. WTI crude oil futures surged 1.11%, trading around $73.79 per barrel, as traders anticipated potential supply disruptions due to the conflict.

Tensions intensified following Israel’s recent military strike on Iranian territory, prompting a retaliatory missile attack from Tehran. This exchange marked a significant escalation in regional hostilities, rattling global markets and sending major indexes into a tailspin last Friday.

On Friday, the Dow Jones plunged more than 700 points, with the S&P 500 and Nasdaq Composite each falling over 1%. This downturn pushed all three indexes into negative territory for the week: the Dow lost 1.3%, the S&P 500 declined 0.4%, and the Nasdaq dropped 0.6%.

Amid the market turmoil, investors turned to safe-haven assets. Gold prices spiked as traders sought refuge from volatility, reflecting the traditional behavior during periods of geopolitical uncertainty.

Over the weekend, the conflict escalated further. Both Israel and Iran reportedly targeted each other’s energy infrastructure, raising fears of broader instability. Iran has also threatened to close the Strait of Hormuz, a critical chokepoint for global oil shipments—heightening global economic risk.

“This marks the most significant attack on Iranian territory since the 1980s,” said Ed Mills, Washington policy analyst at Raymond James. “The likelihood of regional escalation has increased. Whether the conflict broadens will likely depend on the level of U.S. or Russian involvement in the coming days.”

Looking ahead, investors are watching closely for Monday’s manufacturing survey data, which precedes the Federal Reserve’s interest rate decision on Wednesday. According to the CME FedWatch Tool, markets are pricing in a 97% chance that the Fed will hold rates steady, despite growing pressure from President Donald Trump on Fed Chair Jerome Powell to lower rates.

However, surging oil prices and geopolitical uncertainty may reduce the likelihood of a rate cut anytime soon, as inflation risks remain heightened.