Investors began the week navigating a mix of geopolitical tensions, concerns over artificial intelligence valuations and anticipation ahead of Apple’s (NASDAQ:AAPL) annual developers conference, where the company is expected to outline the next phase of its AI strategy.
U.S. futures point to a mixed open
At 03:32 ET (07:32 GMT), futures tied to the Dow Jones Industrial Average were down 102 points, or 0.25%, while S&P 500 futures gained 0.3% and Nasdaq 100 futures advanced 0.7%.
The mixed performance followed a sharp sell-off on Wall Street on Friday. A stronger-than-expected U.S. employment report increased expectations that the Federal Reserve may need to maintain a tighter monetary stance or even raise rates later this year if energy-driven inflation accelerates.
The S&P 500 posted a 2.64% decline, its worst daily performance of 2026, ending a nine-week winning streak. Technology stocks were particularly weak, with the Philadelphia Semiconductor Index falling more than 10% after Broadcom’s (NASDAQ:AVGO) quarterly results failed to meet the market’s elevated expectations surrounding AI-related growth.
Commenting on the week ahead, Deutsche Bank analysts wrote: “What a backdrop for the main economic event of the week, namely Wednesday’s May U.S. CPI report.”
They added: “The timing is critical with the [Fed]’s next policy meeting, and Kevin Warsh’s first as Chair, a week later. For a while now the case for hiking has looked notably stronger than the case for a cut and last Friday’s payrolls has hugely reinforced that.”
Fresh Iran-Israel clashes unsettle investors
Geopolitical concerns intensified after Iran and Israel exchanged new strikes, casting doubt on the future of a fragile ceasefire brokered by the United States.
The renewed hostilities mark the first direct military confrontation between the two countries since the truce reached in April.
Reports suggest the latest escalation began with an Israeli strike on Beirut, followed by retaliatory actions from Tehran and further Israeli attacks against targets in western and central Iran.
The Wall Street Journal reported that Israel activated air-raid warning systems and intercepted a ballistic missile launched from Yemen. Iran’s Revolutionary Guards also claimed responsibility for attacks on military airbases in southern Israel.
While President Donald Trump maintained that diplomatic efforts remain on track, an Iranian source involved in negotiations told MS NOW that a deal is “no longer feasible at this stage.”
Oil extends gains amid supply concerns
Brent crude climbed 5.1% to $97.81 per barrel as traders continued to assess the risks posed by disruptions around the Strait of Hormuz.
The strategic shipping route remains a key concern for energy markets, given that roughly 20% of global oil and LNG flows pass through the waterway.
Rising crude prices have reignited fears that inflation could accelerate once again, potentially forcing central banks to keep borrowing costs elevated.
RBC analysts noted that “it seems as though good news is being treated as bad news if it stokes fears of higher interest rates.”
Gold pressured by rates outlook and stronger dollar
Gold prices fell to their lowest level in eleven weeks as investors reassessed the outlook for interest rates.
Higher borrowing costs tend to reduce the appeal of non-yielding assets such as gold, while continued demand for the U.S. dollar has provided an additional headwind for bullion.
ING analysts said: “The geopolitical backdrop is also shifting dollar-positive, with most surprised that Brent is not trading even higher now that Iran and Israel are directly exchanging fire.”
Apple’s AI strategy under the spotlight
Attention is also turning to Apple’s Worldwide Developers Conference, which begins on Monday and is expected to feature a range of AI-related announcements.
Investors are looking for evidence that Apple can close the perceived gap with rivals in the race to commercialise artificial intelligence technologies.
The company has faced criticism following delays to planned Siri upgrades and a lukewarm response to some of its initial AI initiatives.
According to BofA Global Research, “The key announcements to watch include an enhanced Siri experience, progress on Gemini-enabled Apple AI, potential Siri app, and broader app-intent and developer tools that could help define Apple’s agentic AI roadmap.”
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