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U.S. stock futures were steady at the start of trading on Monday, despite escalating military tensions between the United States and Iran, as oil prices climbed to their highest levels in months amid growing concerns about global energy supplies. S&P 500 futures edged up 0.2% , while Nasdaq futures rose 0.5% , and Dow Jones futures moved near previous closing levels, suggesting investors were awaiting further geopolitical developments and corporate earnings reports.
US stock indices ended last week with notable declines, with the S&P 500 losing about 1.6% , the Nasdaq dropping 2.9% , and the Dow Jones Industrial Average slipping 0.9% . This was driven by continued selling pressure on semiconductor stocks and a waning of the momentum that had fueled artificial intelligence stocks in recent months. Globally, markets were mixed, with South Korea’s Kospi index falling 0.8% and the Kosdaq Composite index of small-cap companies declining 1.8% . European stock futures pointed to a subdued opening as investors continued to assess developments in the Middle East.
Oil prices are back in the spotlight
The market movements followed the United States’ announcement of its ninth consecutive night of military strikes against targets inside Iran, in operations aimed, according to Washington, at limiting Tehran’s ability to threaten commercial shipping in the Strait of Hormuz , one of the world’s most important strategic oil transit chokepoints. Energy markets reacted swiftly to these developments, with West Texas Intermediate (WTI) crude rising by more than 3% to surpass $85 a barrel , while Brent crude climbed to over $91 a barrel .
The rise in oil prices is raising investor concerns about a return of inflationary pressures, as higher energy costs lead to increased production and transportation expenses, which could impact price levels across various economic sectors. Analysts believe that if oil prices remain at these levels, central banks, particularly the US Federal Reserve , may postpone any steps toward interest rate cuts or even maintain their tight monetary policies for an extended period, potentially increasing borrowing costs and putting pressure on financial markets.
Corporate results are becoming the main driver of markets.
Despite the continued dominance of geopolitical tensions, investors are gradually turning their attention to the US corporate earnings season, which could become the primary driver of markets in the coming days. Alphabet and Tesla are expected to release their financial results after the close of trading on Wednesday, while markets are awaiting Intel’s results on Thursday, especially after the company’s stock fell by about 13% last week amid a sell-off in the semiconductor sector.
Investors are hoping that the results of major technology companies will confirm continued strong earnings growth, justifying their high valuations, especially after recent waning enthusiasm for artificial intelligence stocks. Amid ongoing geopolitical tensions and rising energy prices, analysts believe that markets will remain influenced by two key factors: developments in the Middle East crisis and the earnings reports of major companies, which will determine the direction of US stocks in the coming weeks.
