U.S. stock futures pointed to a weaker start on Monday, with equities likely to retreat after posting strong gains in the previous week.
Investor sentiment has been dampened by rising fears of renewed escalation in the Middle East, following the collapse of weekend negotiations between Washington and Tehran.
“They have chosen not to accept our terms,” said U.S. Vice President JD Vance during a brief press briefing, while leaving open the possibility of future agreement. Iran, for its part, said that “unreasonable U.S. demands” had stalled progress in the talks.
Higher oil prices are also expected to weigh on early trading, with crude futures climbing back above $100 per barrel.
The surge in oil comes after President Donald Trump announced that the U.S. would move to block access to the strategically important Strait of Hormuz after negotiations broke down.
“Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,” Trump wrote on Truth Social.
He added that U.S. forces were “locked and loaded” and ready to “finish up the little that is left of Iran” at an “appropriate moment.”
“Markets are once again being pulled between competing forces, with geopolitical escalation in the Middle East reintroducing uncertainty just as investors turn their focus toward the start of earnings season,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
She added, “After a brief period of relief following ceasefire hopes, the breakdown in talks and the emergence of a ‘blockade of the blockade’ strategy by the US has pushed the narrative back toward duration risk: how long this conflict will last and how deeply it will impact the global economy.”
After recovering from an early decline on Thursday to close mostly higher, stocks showed limited direction on Friday. Major indices moved unevenly throughout the session before finishing mixed.
The tech-heavy Nasdaq rose 80.48 points, or 0.4%, to 22,902.89, its highest close in over a month. Meanwhile, the S&P 500 slipped 7.77 points, or 0.1%, to 6,816.89, and the Dow Jones Industrial Average dropped 269.23 points, or 0.6%, to 47,916.57.
Despite Friday’s mixed performance, all three major indices recorded solid gains for the week, largely driven by a sharp rally on Wednesday. The Nasdaq jumped 4.7%, the S&P 500 climbed 3.6%, and the Dow advanced 3.0%.
The Dow’s decline was partly driven by a drop in Salesforce (NYSE:CRM), which fell 3.5%. Other components including Nike (NYSE:NKE), IBM (NYSE:IBM) and Verizon (NYSE:VZ) also posted notable losses.
Broader market sentiment remained cautious amid ongoing uncertainty about whether the fragile Middle East ceasefire can hold.
Ahead of the weekend talks in Pakistan, Trump had criticised Iran’s handling of oil shipments through the Strait of Hormuz, saying it was doing a “very poor job” and adding, “That is not the agreement we have!”
He also reacted to reports that Iran was charging fees to tankers passing through the strait, warning, “They better not be and, if they are, they better stop now!”
In a separate post, Trump added, “The Iranians don’t seem to realize they have no cards, other than a short term extortion of the World by using International Waterways. The only reason they are alive today is to negotiate!”
Investors largely brushed aside weaker consumer sentiment data released by the University of Michigan, which showed a sharp drop in April.
The university’s consumer sentiment index fell to 47.6 from 53.3 in March, well below expectations of 52.0 and marking its lowest level on record, amid concerns over the Iran conflict and rising inflation expectations.
Separately, data from the U.S. Department of Labor showed consumer prices rose 0.9% in March, in line with forecasts.
Sector performance was mixed, reflecting the broader market’s lack of direction.
Semiconductor stocks stood out, with the Philadelphia Semiconductor Index rising 2.3% to a record closing high.
Gold and computer hardware shares also performed strongly, while software, biotechnology and healthcare stocks came under pressure.