Wall Street is poised for a negative start to the week, with futures linked to the S&P 500 and Dow Jones Industrial Average trading lower in early Monday deals amid rising geopolitical tensions.
As of around 6:11 a.m. ET, E-mini S&P 500 futures were down 34 points, or 0.5%, at 6,821.25, while E-mini Dow futures slipped 212 points, or 0.44%, to 47,917, pointing to a weak opening for US equities.
The futures linked to tech-heavy Nasdaq declined 0.61%, or 154 points, to 25,127.25.
Investor sentiment has soured after weekend negotiations between the US and Iran failed to yield a breakthrough, reigniting fears of escalation in the Middle East. The US has since moved to impose a blockade on Iranian shipping, raising concerns over disruptions to critical energy routes, particularly through the Strait of Hormuz.
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Oil prices jumped sharply, with Brent crude rising 7% to around $102 a barrel, extending gains of more than 40% since the conflict began disrupting shipping lanes. The surge in energy costs has reignited inflation concerns and added pressure on equities, while pushing investors toward safe-haven assets.
“The market reaction today is interesting because everything's a little bit weaker, yields a little bit higher, but not falling out of bed in the way we saw a couple of weeks ago,” Lauren van Biljon, senior portfolio manager at Allspring Global Investments, told Reuters.
“I wonder if that just tells us more that markets were perhaps quite realistic about the negotiations over the weekend. It was always a long shot that we were going to get something comprehensive and agreed in that first round of talks, and obviously we didn't get that,” she added.
Asian markets closed lower on Monday, with India's benchmark index Nifty 50 settling 0.86% lower at 23,842.65.
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