U.S. stock futures traded flat and oil prices rose following surprise U.S. strikes on Iranian nuclear facilities over the weekend. Markets are now watching closely for Iran’s response, which could impact global oil supplies and geopolitical stability. Meanwhile, the U.S. Senate prepares for a vote on a major tax-and-spending bill, and traders await key economic data.
Stock Futures Hold Steady Amid Geopolitical Tensions
As of 03:36 ET (07:36 GMT), Dow futures dipped by 25 points (0.1%), while S&P 500 and Nasdaq 100 futures remained largely unchanged. Wall Street closed lower on Friday as investors absorbed escalating conflict between Israel and Iran and anticipated U.S. military involvement.
President Trump confirmed strikes on three Iranian nuclear sites Saturday, fast-tracking a decision he previously said could take weeks. Markets are evaluating the implications for inflation, interest rates, and broader sentiment.
Oil Prices Climb on Supply Concerns
Oil markets reacted sharply to the developments. By 03:38 ET, Brent crude rose 0.8% to $76.11, while WTI climbed 0.9% to $74.48 per barrel. Analysts warn that further escalation, particularly involving the Strait of Hormuz, could disrupt global crude flows and reignite inflation fears.
Warren Patterson of ING noted that energy markets now face significant supply risks, given Iran’s uncertain retaliation plans.
Markets Await Iran’s Next Move
Tehran has vowed “everlasting consequences” but hasn’t detailed its response. Increased airstrikes on Israel and threats to expand Iran’s target range suggest potential retaliation. Some reports indicate Iran could block the vital Strait of Hormuz or strike U.S. military assets in the region.
While tensions have risen, some analysts say Trump’s definitive action may reduce short-term uncertainty, offering slight relief to markets. However, geopolitical risks still loom, and broader challenges such as tariffs and fiscal policy remain in focus.
Senate Pushes Forward with Fiscal Bill
The U.S. Senate plans to vote on its version of a sweeping tax-and-spending bill this week, aiming for Trump’s approval by July 4. The bill seeks to extend 2017 tax cuts and increase defense and border spending, offset by cuts to programs like Medicaid.
However, the Senate parliamentarian raised concerns that some GOP proposals may fall outside reconciliation rules, potentially complicating the legislative path.
PMIs, Consumer Confidence and Inflation Data Ahead
Investors await S&P Global’s June PMI reports, with the manufacturing index expected to dip to 51.1 and services to 52.9. These numbers will preview a key week for economic data, including consumer confidence (Tuesday) and a Fed-tracked inflation measure (Friday).
While confidence has weakened amid tariff worries, inflation remains subdued, and U.S.-China trade talks offer some hope for easing tensions.