Traders wait for Voyager Technologies to begin trading during the company’s IPO at the New York Stock Exchange (NYSE) in New York City, U.S., June 11, 2025.
Brendan McDermid | Reuters
Stock futures rebounded early Monday as investors were optimistic that the conflict between Israel and Iran may remain contained. The spike in oil prices due to the escalating conflict also eased.
Dow Jones Industrial Average futures jumped 268 points, or 0.6%. S&P 500 futures added 0.7%, while Nasdaq 100 futures rose 0.9%.
WTI crude oil futures fell more than 1% to $72.20 a barrel after trading above $77 earlier in the overnight session.
Traders have been closely watching the Middle East after Israel’s strike on Iran Friday. Iran launched missiles in retaliation, increasing the severity of conflict in the region.
The attacks continued for a fourth day Monday, 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. Israel claimed on Monday to have achieved “aerial superiority” over Iran, according to a military spokesperson.
“The market is taking comfort from the prospect that the conflict could stay in the limited war mode,” Krishna Guha, Evercore ISI’s vice chairman, said in a note Monday. “We assess this is possible but continue to anticipate the conflict will last for a few weeks in the base case and still see elevated risk of escalation that envelops energy and draws in the U.S.”
The conflict prompted a sell-off in stocks on Friday, with the Dow tumbling more than 700 points in the session. All three of the major indexes dropped more than 1% in the trading day. Friday’s declines pulled the three indexes into red territory for the week. The Dow finished the week down 1.3%, while the S&P 500 and Nasdaq Composite lost 0.4% and 0.6%, respectively.
Oil prices initially surged following Israel’s attack, weighing on risk assets. Gold prices also rallied, as the metal is considered a safe haven trade that investors flock to in times of market volatility.
All of the ‘Magnificent Seven’ stocks were higher in premarket trading Monday as the pullback in oil prices caused investors to take on more risk again. Tesla was up nearly 2%, and Meta Platforms was up nearly 1%. Additionally, Palantir, which is viewed as a beneficiary of increasing global conflict, rose more than 2%.
Investors will monitor manufacturing survey data due Monday morning, which comes ahead of the Federal Reserve’s interest rate decision on Wednesday. Fed funds futures are pricing in a nearly 100% 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.
