U.S. stock index futures fell as investors assessed the fallout of intensified U.S. and Israeli strikes on Iran and braced for the possibility that a surge in energy prices could drive inflation higher. With the conflict showing little sign of cooling, oil jumped 2.2%, gold extended its rally for a fifth straight session, the dollar strengthened, and the U.S. 10-year Treasury yield jumped to its highest level in more than a week. Get a daily digest of breaking business news straight to your inbox with the Reuters Business newsletter. Sign up here. Advertisement · Scroll to continue
The U.S. and Israel launched an air campaign against Iran on Saturday, striking Tehran and killing Iranian Supreme Leader Ali Khamenei. In response, Iran and its proxy Hezbollah retaliated, drawing the wider Gulf region into the escalating conflict. U.S. President Donald Trump sought to justify a broad, open-ended war, saying on Monday the campaign was ahead of expectations. Investors worried about the inflation shock that could follow an energy squeeze. With the Strait of Hormuz closed to marine traffic, a surge in oil prices could quickly seep into the broader economy, complicating an already jittery outlook for the Federal Reserve as hot inflation readings pile up and policymakers show signs of diverging views. Advertisement · Scroll to continue
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That backdrop has reinforced expectations that the F
