New York, Aug 31: US stock futures moved lower on Monday as fresh military action between the US and Iran raised concerns about a wider escalation in the Middle East and pushed crude oil prices higher.
Dow Jones futures were down around 0.29 per cent, while S&P 500 futures slipped 0.36 per cent and Nasdaq-100 futures declined 0.4 per cent. Asian markets also remained under pressure, with Japan’s Nikkei, South Korea’s Kospi and Hong Kong’s Hang Seng trading lower.
The latest market weakness followed US strikes on two Iranian rocket launchers on Larak Island in the Strait of Hormuz. Iran subsequently launched attacks on US bases in Jordan, raising concerns about further escalation in a region that is crucial to global energy supplies.
Oil prices reacted quickly to the developments. Brent crude moved back above $90 a barrel, while US West Texas Intermediate also gained more than 2 per cent in early trading. The rise has renewed concerns that prolonged tensions around the Strait of Hormuz could disrupt energy flows and add to inflationary pressure.
The geopolitical uncertainty comes at a sensitive time for US markets. Wall Street is heading towards the end of a strong August, with the Dow on course for its fifth consecutive monthly gain, while the S&P 500 and Nasdaq are also set to finish the month higher.
Technology stocks have been among the biggest drivers of the month’s gains, particularly companies linked to artificial intelligence. However, higher Treasury yields and renewed expectations of a US rate hike could make it harder for the rally to continue at the same pace.
Investors are now balancing two major concerns: the possibility of higher energy costs caused by the Middle East conflict and the risk that persistent inflation could keep US interest rates elevated for longer. The combination could weigh particularly heavily on growth and technology stocks.
Markets will also turn their attention to the US jobs report due later this week, along with manufacturing and services data. These figures could provide fresh clues about the strength of the economy and influence expectations for the Federal Reserve’s next policy decision.
With August ending against a backdrop of geopolitical uncertainty, rising oil prices and shifting rate expectations, investors are likely to remain cautious and prepare for potentially higher volatility in September.