US stock index futures moved lower on Monday as crude oil prices recovered following developments surrounding Iran and the Strait of Hormuz.
US crude oil futures climbed 2.6%, reversing part of Friday’s 2.3% decline. The latest move followed the rejection by President Donald Trump of a conditional Iranian proposal concerning a ceasefire and the reopening of the Strait of Hormuz.
According to the source material, Iran’s proposal called for a seven-day ceasefire and the reopening of the strait, along with a resumption of nuclear negotiations, in exchange for the US lifting its blockade of Iranian ports.
The Wall Street Journal, citing US officials, reported that Trump had told aides he expects to resume bombing Iran following the November midterm elections.
Investors Await US Inflation Data
The US economic calendar is relatively limited at the beginning of the week, with attention expected to turn to Wednesday’s personal income and spending report from the Commerce Department.
The report covers August and includes inflation measures monitored by the Federal Reserve.
The figures will provide additional data on inflation before the Federal Reserve’s monetary policy meeting scheduled for late next month.
Major US Indexes Gained on Friday
Wall Street finished higher on Friday after the major averages fluctuated during the early part of the session.
The Dow Jones Industrial Average added 478.64 points, or 0.9%, to close at 51,828.62. The index had previously reached its lowest closing level in more than three months.
The Nasdaq Composite gained 129.34 points, or 0.5%, to finish at 27,068.72, while the S&P 500 increased 39.28 points, or 0.5%, to 7,743.41.
Across the week, the Nasdaq advanced 2.1%, the S&P 500 rose 1.2% and the Dow gained 0.3%.
Treasury Yields Remain Elevated
Friday’s gains in US equities coincided with a decline of more than 2% in US crude oil futures following a 4.5% increase over the previous two sessions.
The move in oil followed reports that Iran had submitted a proposal to the US addressing the conflict and the reopening of the Strait of Hormuz.
US Treasury yields also remained elevated. The benchmark 10-year Treasury yield ended Friday at its highest closing level since July 2007, although it retreated from its highest point of the session.
The source material said inflation concerns had contributed to expectations that the Federal Reserve would raise interest rates again next month.
Airline and Technology Shares Rise
Airline stocks advanced during Friday’s decline in crude oil prices, with the NYSE Arca Airline Index rising 3.7% to its highest closing level in more than a month.
The NYSE Arca Computer Hardware Index gained 2.3%, while semiconductor, software and banking stocks also moved higher.
Natural gas stocks declined during the session alongside lower natural gas prices.
Monday’s futures moves put crude oil prices, Treasury yields and developments involving Iran back among the factors being monitored by US equity investors.
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