U.S. stock futures are pointing sharply lower, despite Wall Street’s rebound on Monday following the outbreak of renewed hostilities involving Iran. President Donald Trump suggested that the joint U.S.-Israeli military effort could extend for weeks, pledging that Washington will do “whatever it takes.” Oil prices are climbing on concerns about potential supply disruptions through the critical Strait of Hormuz, while spot gold has edged lower as the U.S. dollar strengthens. Investors are also awaiting quarterly earnings from Target (NYSE:TGT).
Futures signal renewed selling pressure
U.S. equity index futures fell steeply early Tuesday, indicating a weak open after markets steadied in the previous session even as geopolitical tensions persisted.
At 03:03 ET, Dow futures were down 540 points, or 1.1%. S&P 500 futures had declined 76 points, also 1.1%, while Nasdaq 100 futures dropped 347 points, or 1.4%.
On Monday, the S&P 500 and the tech-focused Nasdaq Composite both closed higher, bouncing back from sharp early losses sparked by weekend strikes on Iran carried out by the U.S. and Israel that reportedly killed Iran’s long-serving leader Ayatollah Ali Khamenei. The Dow Jones Industrial Average ended just 0.2% lower, trimming most of its initial slide.
“[S]tocks saw pressure out of the gate, but the major indices staged an impressive rebound from their lows as U.S. equity investors stayed calm about events unfolding in the Middle East,” analysts at Vital Knowledge wrote in a note to clients.
They added that although Trump warned the military campaign could last four to five weeks and Iran responded with airstrikes across the region, the “consensus view is that this conflict won’t metastasize into an uncontrolled quagmire.”
Beyond the Middle East developments, investors were also weighing a rebound in previously out-of-favor technology shares and fresh data showing a spike in input costs for U.S. manufacturers.
Iran conflict remains central focus
The outlook for the conflict remains uncertain, with Trump acknowledging that the timeline could extend beyond earlier projections.
At his first public appearance since the launch of the attacks, Trump said “we’re already substantially ahead of our time projections,” but stressed that “whatever the time is, it’s okay.”
“Whatever it takes,” Trump said, later adding on social media that the United States has a “virtually unlimited” supply of certain types of weaponry.
Reuters reported that the joint U.S.-Israeli offensive has led to the sinking of at least 10 Iranian naval vessels and struck more than 1,000 targets. Israel’s military said it is continuing operations in Iran and neighboring Lebanon, and that its forces have advanced into new areas of southern Lebanon.
According to media reports, Tehran escalated its retaliation early Tuesday, striking sites in the Gulf region, including the U.S. embassy in Saudi Arabia and Dubai International Airport, a key global travel hub. Airline and hotel stocks were among the worst performers on Monday, reflecting fears of widespread travel disruptions.
Amazon’s cloud computing arm disclosed that two of its facilities in the UAE and Bahrain were hit by drone attacks and were “significantly impaired.”
Oil prices extend sharp gains
Crude prices continued to rally Tuesday, adding to substantial gains from the prior session as threats to shipping flows through the Strait of Hormuz intensified supply concerns.
Brent crude futures jumped 4.3% to $81.10 per barrel, while U.S. West Texas Intermediate crude rose 4% to $74.05 per barrel.
Both benchmarks had already settled more than 7% higher on Monday after surging as much as 13% to their highest levels in a year.
Tensions escalated after Iranian officials vowed to target any vessel attempting to pass through the Strait of Hormuz, a strategic chokepoint through which roughly one-fifth of global oil supply transits.
“While a full, long-term closure of the Strait remains an extreme scenario, even partial disruption to tanker traffic tightens market balances and could push crude prices materially higher if sustained. Continued military escalation and elevated risk premia in energy markets are likely to dominate price action until there is clearer evidence of de-escalation or alternative supply routes emerge,” Laurence Booth, Global Head of Markets at CMC Markets, told Investing.com.
Some analysts noted that potential output increases from OPEC+ could partially offset any significant supply interruptions.
Energy-related fears weighed heavily on Asian markets Tuesday, with stocks in South Korea, Japan and Taiwan posting declines. European equities also moved lower.
Gold slips as dollar firms
Spot gold eased after early gains, pressured by a strengthening U.S. dollar even as investors monitored escalating geopolitical risks and oil market volatility.
Spot gold was last down 0.3% at $5,309.17 per ounce, after climbing as much as 1% earlier in the session to $5,379.65 per ounce. U.S. gold futures edged up 0.2% to $5,320.24 per ounce. The metal had advanced 1% in the previous session.
Gold is typically viewed as a safe-haven asset during periods of geopolitical stress, but it often comes under pressure when the dollar appreciates.
Target earnings in spotlight
Target is set to release its latest quarterly results, offering further insight into U.S. consumer spending trends amid persistent cost-of-living pressures.
Although Trump has described the U.S. economy as “roaring,” recent polling suggests many Americans remain unconvinced. A Reuters/Ipsos survey last month found that 68% of respondents — including members of Trump’s Republican Party — disagreed with that assessment.
U.S. economic growth slowed more than expected in the fourth quarter, though many analysts attributed the weakness to a temporary government shutdown, noting that underlying consumer and business spending remained solid. Some economists project modest economic expansion in 2026, supported in part by tax cuts included in Trump’s signature budget legislation enacted last year.
Against this backdrop, Target has struggled to attract budget-conscious shoppers, in contrast to competitors such as Walmart. The retailer’s profit has fallen 14% over the past five years.
Large shareholders, including public pension funds in New York and California, have since begun openly questioning the company’s strategic decisions and leadership approach.
