Stock Futures Waver Amid Rising Geopolitical Risk as Israel-Iran Attacks Continue

Why this matters: The escalating conflict between Israel and Iran is creating uncertainty in the global economy, particularly in the energy sector. Investors are closely monitoring the situation, as further escalation could lead to increased market volatility.

Stock futures dropped Sunday night as investors continued monitoring escalating conflict between Israel and Iran, which also weighed on the market last week. Dow futures fell more than 170 points shortly after 6 p.m. ET. S&P 500 and Nasdaq 100 futures each slid 0.4%.

Oil prices jumped following Israel's attack. Gold prices also rallied, as the metal is considered a safe haven trade that investors flock to in times of market volatility. The attacks continued through the weekend, with the two countries targeting each others' energy facilities, an escalation which could rattle the global economy and markets further in the new week. Iran said it is considering shutting down the Strait of Hormuz, a key route for the global oil market.

Investors will monitor manufacturing survey data due Monday morning, which comes ahead of the Federal Reserve's interested rate decision on Wednesday. Fed funds futures are pricing in a nearly 97% likelihood of the central bank keeping rates unchanged, per CME's FedWatch tool even as President Donald Trump has been pressuring Fed Chief Jerome Powell for a rate cut. Higher oil prices from the Middle East conflict likely further reduce the odds the Fed will ease monetary policy anytime soon.

The escalating conflict between Israel and Iran is creating uncertainty in the global economy and leading to market volatility.

Oil prices have jumped following Israel's attack on Iranian energy facilities. The potential shutdown of the Strait of Hormuz by Iran could further impact global oil markets.

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