United States stock futures pulled back from record valuations on Sunday night (Monday AEST) as renewed tensions between Washington and Tehran unsettled markets and drove a fresh surge in oil prices.
By 10:15 am AEST (12:15 am GMT), futures for the Dow Jones Industrial Average were down around 1%, while S&P 500 futures fell 0.8% and Nasdaq-100 futures slipped 0.7%.
The downturn followed a series of developments over the weekend that heightened geopolitical risk. U.S. President Donald Trump said American forces had fired upon and seized an Iranian-flagged cargo ship in the Gulf of Oman, further intensifying the standoff.
The Iranian vessel “is under U.S. Treasury Sanctions because of their prior history of illegal activity. We have full custody of the ship, and are seeing what’s on board”, Trump said in a post on Truth Social.
The seizure came after Iran reportedly rejected a proposed new round of peace talks in Pakistan, adding to uncertainty over diplomatic efforts to de-escalate the conflict.
Trump also warned of potential military escalation, threatening to target Iranian infrastructure if a deal is not reached. A temporary ceasefire between the two sides is due to expire later this week.
Energy markets reacted swiftly to the rising tensions. U.S. West Texas Intermediate crude futures jumped 8% to US$90.54 per barrel, while Brent crude rose 6% to $96.50.
The Strait of Hormuz remains central to market anxiety. While Iran had earlier indicated the critical shipping route would reopen following a ceasefire with Lebanon, restrictions on vessel traffic were reinstated over the weekend, with Iranian state media claiming the U.S. had failed to meet its obligations.
Trump has maintained that the U.S. naval blockade in the region will remain in place until Iran complies with American demands, despite Tehran’s objections.
The pullback in futures comes after a strong week for Wall Street. The S&P 500 rose 4.5% last week, while the Nasdaq Composite surged 7.2%, both reaching record highs. The Nasdaq also notched a 13-session winning streak on Friday, its longest run since 1992.
