United States stock futures advanced on Sunday evening (Monday AEST) even as geopolitical tensions escalated in the Middle East, with ongoing hostilities between Israel and Iran prompting concerns over global economic stability and driving oil prices sharply higher.
At 9:05 am AEST, Dow Jones Industrial Average futures rose 0.7%, while S&P 500 futures gained 0.9% and Nasdaq 100 futures climbed 1%. The upward move followed a turbulent close to the previous week, where renewed conflict in the Middle East spooked markets.
Oil prices spiked again at the start of the new trading week. West Texas Intermediate (WTI) crude futures surged 3%, trading above US$75 a barrel, as fears of supply disruption mounted.
Iran’s threats to potentially shut down the Strait of Hormuz — a vital corridor for global oil shipments — added to market anxiety.
Futures rise despite growing investor caution. Over the weekend, reports emerged that U.S. President Donald Trump had vetoed an Israeli plan to assassinate Iran’s Supreme Leader, Ayatollah Ali Khamenei.
The revelation adds to already heightened tensions following Israel’s missile strikes last week, which Iran responded to with its own barrage of missiles. Both countries have continued to target each other’s energy infrastructure, signalling no immediate de-escalation.
The violent exchanges weighed heavily on equity markets on Friday. The Dow Jones plunged more than 700 points during the session, with the S&P 500 and Nasdaq Composite both shedding over 1%.
All three major benchmarks ended the week in negative territory, with the Dow down 1.3%, the S&P 500 off 0.4%, and the Nasdaq Composite declining 0.6%.
Looking ahead, investors will watch closely for fresh manufacturing survey data due later on Monday, which will offer an updated gauge of economic activity. The data release will precede the Federal Reserve’s much-anticipated interest rate decision, scheduled for Wednesday.
According to the CME FedWatch Tool, markets are overwhelmingly pricing in a 96.9% probability that the Federal Reserve will leave its benchmark interest rate unchanged.
Nonetheless, political pressure has increased, with President Trump openly calling on Fed Chair Jerome Powell to resume rate cuts in response to inflation data and the shifting global outlook.
