US stock futures climbed on Monday, eyeing a potential rebound as the shockwaves of the Israel-Iran conflict started to recede despite an exchange of missile strikes throughout the weekend.
Futures on the Dow Jones Industrial Average (YM=F) and the S&P 500 (ES=F) both rose aroung 0.4%, while contracts tied to the Nasdaq 100 (NQ=F) gained 0.5%. The cautious optimism follows a bruising Friday session that saw the Dow plunge more than 700 points in a broad risk-off move.
Meanwhile, oil (CL=F) prices edged lower after jumping in the wake of the weekend attacks, having surged last week to their highest levels since January.
The geopolitical flare-up comes at a delicate moment for markets already buffeted by tariff insecurity. Friday’s selloff dragged the major US indexes into negative territory for the week.
Read more: The latest on Trump’s tariffs
Now investors are regaining some appetite for risk amid rising optimism that the conflict won’t spill over into a broader regional crisis. President Trump said on Sunday there’s a “good chance” of an Israel-Iran peace deal, but the hostilities may need to play out first. “Sometimes they have to fight it out, but we’re going to see what happens,” he told reporters.
A measure of calm is also returning to the oil market, rattled by fears of disruption to the global energy supply. Tehran has hinted it may close the Strait of Hormuz, a critical chokepoint for roughly one-fifth of the world’s oil.
Crude oil jumped out of the gate on Sunday evening after the dramatic weekend of retaliatory strikes targeting energy infrastructure on both sides. West Texas Intermediate (CL=F) futures spiking over 6% to top $76 a barrel, while Brent crude (BZ=F) saw a similar move to just below $78 a barrel.
But futures turned lower on Monday, down almost 1% to take Brent below $74 a barrel and WTI around $72 a barrel.
Gold (GC=F) prices also pulled back, having rallied alongside oil as it drew safe-haven flows amid rising volatility. The precious metal traded lower at around $3,435 an ounce.
Looking ahead, investors will be parsing fresh data on Monday from the New York Fed’s Empire State Manufacturing Survey for signs of economic resilience, or weakness, ahead of Wednesday’s interest rate decision from the Federal Reserve.
Markets overwhelmingly expect the Fed to hold rates steady. However, climbing oil prices could complicate the Fed’s path forward on inflation. While President Trump has maintained pressure on Chair Jerome Powell to cut rates, current market dynamics may leave little room to budge.
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