U.S. equity futures were largely unchanged on Monday, while oil prices moved higher following sudden American airstrikes on Iranian nuclear sites over the weekend. Investors are now closely monitoring how Tehran might respond — a move that could have serious implications for global oil supplies and geopolitical stability. Meanwhile, attention is also turning to upcoming economic indicators and U.S. fiscal policy developments.
Markets Cautious as U.S. Strikes Heighten Tensions
As of 08:36 BST (03:36 ET), Dow Jones futures slipped by 25 points (0.1%), with S&P 500 and Nasdaq 100 futures holding steady. On Friday, Wall Street ended the week in negative territory, as escalating conflict between Israel and Iran — and possible U.S. military involvement — rattled investor sentiment.
U.S. President Donald Trump confirmed targeted strikes on three Iranian nuclear facilities over the weekend. The move followed earlier suggestions that the decision could be delayed by up to two weeks. Markets are now assessing the broader impact on inflation, interest rates, and overall risk appetite.
Oil Prices Rise on Supply Fears
Brent crude futures for August delivery rose 0.8% to $76.11 a barrel, while U.S. benchmark WTI crude gained 0.9% to $74.48, as of early Monday morning. The gains reflect growing concerns that further escalation in the Middle East — particularly involving the vital Strait of Hormuz — could significantly disrupt global oil flows.
“Since the U.S. targeted Iranian nuclear facilities over the weekend, supply risks for energy markets have increased significantly,” said Warren Patterson, Head of Commodities Strategy at ING.
Focus on Iran’s Retaliation
Iran has yet to provide a detailed response but has vowed “everlasting consequences.” Tehran has ramped up airstrikes against Israel and suggested the U.S. decision has widened the scope of its possible targets. State media have floated the possibility of blocking the Strait of Hormuz — a crucial chokepoint for global energy shipments — or attacking American military bases in the region.
While geopolitical uncertainty remains high, some analysts say Trump’s definitive move has lifted a cloud of uncertainty over the markets. Still, they caution that lingering concerns about trade policy and fiscal issues will continue to weigh on investor confidence.
U.S. Senate Set to Vote on Major Fiscal Package
Republican senators are pushing to pass their version of a broad tax-and-spending bill this week, with the aim of sending it to President Trump’s desk before 4 July. The proposed legislation would extend the 2017 tax cuts and increase military and border security spending, partly offset by cuts to social programmes such as Medicaid.
However, the Senate’s rules adviser has flagged several items — including proposed cuts to financial regulators — as non-compliant with budgetary procedure, potentially complicating the path forward.
Key U.S. Data in Focus: PMIs and Inflation
Markets will also be closely watching incoming economic data from the U.S. this week. The S&P Global Purchasing Managers’ Index (PMI) for June is expected to show a slight slowdown in activity, with the manufacturing reading forecast to fall to 51.1 and services to 52.9.
These figures precede more important indicators due later in the week, including consumer confidence on Tuesday and a core inflation gauge closely monitored by the Federal Reserve on Friday.
While American consumer sentiment has been weakening due to ongoing trade concerns, inflation remains contained — giving some hope that interest rate cuts could still be on the table later this year.
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