TLDR
- US and Iran exchanged fresh strikes over the weekend, rattling markets
- Nasdaq 100 futures dropped 1%, S&P 500 futures fell 0.3%
- Brent crude rose 3.8% to near $79 a barrel as Hormuz closure threatened
- Bitcoin fell 1.6% to $62,943 reflecting broader risk-off sentiment
- Key inflation data and big bank earnings due this week
Stock futures fell Monday morning after the US and Iran exchanged fresh strikes over the weekend. Nasdaq 100 futures dropped 1%, S&P 500 futures fell 0.3%, and Dow Jones futures were broadly flat.
The latest flare-up in the Middle East spooked investors who had already been watching tensions closely. Both the S&P 500 and Nasdaq managed small gains last week, but those are now under pressure.
Iran’s Islamic Revolutionary Guard Corps said the Strait of Hormuz would be “closed until further notice.” The US disputed this, insisting the strait remains open. No LNG transits have been recorded through the strait since Saturday, according to tracking firm Kpler.
Oil prices jumped sharply on the news. Brent crude climbed 3.8% to $78.89 a barrel. West Texas Intermediate rose 3.7% to $74.04 a barrel. Deutsche Bank analyst Jim Reid said oil markets had “reacted” to reports of damaged vessels, intercepted drones and strikes on energy-linked sites across the Gulf.
President Trump said ceasefire talks with Iran were still ongoing, but also stated he considers the current ceasefire “over.” That contradiction added to investor uncertainty.
Inflation Data and Earnings in Focus
The escalation is coming at a sensitive time for markets. Two key inflation reports are due this week. The Consumer Price Index drops Tuesday, followed by the Producer Price Index on Wednesday.
These reports will help investors gauge whether events in the Middle East are feeding into broader price pressures. They will also shape expectations around Federal Reserve interest rate decisions later this year.
Earnings season also kicks off in earnest this week. JPMorgan Chase, Goldman Sachs and Bank of America are among the banks reporting Tuesday. Netflix and UnitedHealth are also on the calendar.
Taiwan Semiconductor Manufacturing Company reports quarterly results this week too. Its numbers are expected to give a read on demand for AI chips, which has been a closely watched topic on Wall Street.
The AI trade has lost momentum in recent weeks. Investors have been questioning how long major tech companies can keep up heavy spending on AI infrastructure.
South Korean memory chipmaker SK Hynix saw its shares fall 15% on Monday after its US listing debut on Friday. The drop dragged South Korea’s KOSPI index down 9%. It signals ongoing uncertainty around the durability of the AI investment cycle.
Bitcoin Drops as Risk Appetite Fades
Bitcoin fell 1.6% over the past 24 hours to $62,943. The drop reflects a broader pullback from risk assets as geopolitical tensions rose.
The 10-year US Treasury yield edged up 1 basis point to 4.57%. The US dollar slipped 0.1% against a basket of currencies.
With oil spiking, inflation data due and earnings season starting, this week is shaping up to be one of the busiest of the year for markets.
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