US Stock Futures Plunge Amid Middle East Conflict Fears

Alanbatnews -

U.S. stock futures plummeted on Monday, with investors bracing for a potentially protracted conflict in the Middle East that could disrupt global trade and exacerbate inflationary pressures. The Dow Jones Industrial Average futures fell 572 points, or 1.17%, while S&P 500 futures declined 75.75 points, or 1.1%, and Nasdaq 100 futures dropped 364.5 points, or 1.46%.

The escalating tensions follow reported coordinated U.S. and Israeli actions in Iran over the weekend, and subsequent retaliatory measures. U.S. President Donald Trump stated the conflict could extend for several weeks, prolonging market uncertainty.

The CBOE Volatility Index, Wall Street's fear gauge, surged 3.84 points to a three-month high of 23.7. Analysts at Societe Generale noted that while it is premature to draw definitive conclusions, U.S. actions are expected to continue for weeks, suggesting a sustained impact on markets.

Airlines were among the hardest-hit sectors in pre-market trading, with several carriers suspending flights. Delta and United Airlines shares both tumbled more than 5%. Major bank stocks, including Bank of America and Citigroup, also saw declines exceeding 2%.

Investors sought refuge in traditional safe-haven assets like the dollar, while rising precious metal prices bolstered mining companies. Gold Fields shares rose 3.6%, and Barrick Mining gained 2.8%. Defense stocks also experienced notable gains, with Lockheed Martin and RTX shares each jumping around 6%, Kratos shares surging 9%, and AeroVironment shares climbing 10.3%.

The geopolitical shock coincides with existing market uncertainties surrounding artificial intelligence, private credit sector disruptions, and ambiguous trade outlooks. The S&P 500 and Nasdaq recorded their largest monthly declines since March 2025, while the Dow Jones posted a modest gain for the tenth consecutive month, its longest winning streak since January 2018.

Continued increases in oil prices could reignite inflationary pressures, tempering expectations for near-term interest rate cuts by the U.S. Federal Reserve.

Traders are awaiting a series of key U.S. economic data releases this week, including manufacturing purchasing managers' indices for last month, January retail sales figures, ADP employment data, and the closely watched non-farm payrolls report.