U.S. stock futures traded modestly lower early Monday, indicating Wall Street could remain under pressure after Friday’s broad market sell-off.
Geopolitical Concerns Continue to Weigh on Investors
Markets remained focused on escalating tensions in the Middle East after President Donald Trump issued a new warning to Iran, saying the “clock is ticking.”
Posting on Truth Social, Trump said Iran “better get moving, FAST, or there won’t be anything left of them,” intensifying concerns that Washington could return to direct military action.
Axios, citing two U.S. officials, reported that Trump is expected to convene senior national security advisers in the Situation Room on Tuesday to evaluate military options.
The ongoing conflict between the United States and Iran has effectively disrupted traffic through the Strait of Hormuz, one of the world’s most important oil shipping routes, driving crude prices sharply higher and increasing inflation fears.
Bond Markets and Oil Prices Remain in Focus
Treasury yields surged on Friday as investors increasingly speculated that the Federal Reserve’s next policy move could involve raising interest rates rather than cutting them.
On Monday morning, however, yields eased slightly as oil futures pulled back, potentially helping stabilize sentiment on Wall Street.
U.S. Indexes End Friday Deep in the Red
Following gains seen on Thursday, U.S. equities reversed sharply lower during Friday’s trading session, with all three major indexes posting substantial losses.
The Dow Jones Industrial Average dropped 537.29 points, or 1.1%, to close at 49,526.17. The Nasdaq Composite fell 410.08 points, or 1.5%, to 26,225.14, while the S&P 500 lost 92.74 points, or 1.2%, ending at 7,408.50.
Even with Friday’s retreat, the broader weekly performance was relatively stable. The S&P 500 gained 0.1% for the week, while the Nasdaq slipped 0.1% and the Dow declined 0.2%.
Technology Sector Leads Market Weakness
Friday’s decline was partly driven by profit-taking after recent gains pushed the Nasdaq and S&P 500 to fresh record highs.
Technology shares were among the biggest laggards. Intel (NASDAQ:INTC) dropped 6.6%, while Micron Technology (NASDAQ:MU) fell 6.2%.
NVIDIA (NASDAQ:NVDA) also recorded steep losses, sliding 4.4%.
Meanwhile, the benchmark U.S. 10-year Treasury yield climbed to its highest level in nearly a year, adding additional pressure to equity valuations.
The move higher in yields followed economic reports showing accelerating consumer and producer inflation, increasing concerns over future Federal Reserve policy decisions.
CME Group’s FedWatch Tool now shows a 38.9% probability that rates will be a quarter-point higher following the Fed’s final meeting of the year, compared with just 13.7% a week ago.
Oil Rally and Sector Losses Add to Market Pressure
Markets were also pressured by another sharp rise in oil prices, with U.S. crude futures surging more than 4%.
The increase came after talks between President Donald Trump and Chinese President Xi Jinping delivered positive rhetoric but little meaningful progress regarding the conflict involving Iran.
Gold mining shares fell sharply alongside declining precious metal prices, sending the NYSE Arca Gold Bugs Index down 7.1%.
Airline stocks also came under heavy pressure, with the NYSE Arca Airline Index dropping 4.4%.
Semiconductor stocks broadly weakened as well, dragging the Philadelphia Semiconductor Index down 4%.
Steel producers, homebuilding companies and computer hardware stocks also posted notable declines, while energy producers and software shares managed to outperform the broader market.
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