U.S. stock index futures slipped on Sunday evening following a record-setting week on Wall Street, as renewed geopolitical tensions between the U.S and Iran rattled global risk sentiment and lifted oil prices.
S&P 500 Futures fell 0.8% to 7,105.25 points, while Nasdaq 100 Futures declined 0.6% to 26,655.75 points by 20:02 ET (00:02 GMT). Dow Jones Futures dropped 1% to 49,168.0 points.
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U.S. seizes Iranian cargo ship Sentiment turned cautious after Iran said it would not participate in a second round of negotiations that Washington had hoped to convene before a temporary ceasefire expires on Tuesday.
Tensions intensified further after U.S. President Donald Trump said on Sunday that American forces had fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman.
He also warned that the U.S. could “blow up all power plants and bridges” in Iran if Tehran failed to agree to a deal.
The Strait of Hormuz -- one of the world’s most critical oil shipping routes -- was reported closed again, renewing fears of supply disruptions.
Oil prices jumped in Asian trading on Monday, as traders priced in the risk of tighter global supply and potential inflationary pressures.
The rebound in crude prices followed a brief period of stability last week, when a ceasefire agreement between Iran and Lebanon and the reopening of the strait had helped ease geopolitical risk premiums and supported a rally in global equities.
Wall Street is coming off a winning week Wall Street is coming off a strong week, with the S&P 500 and Nasdaq Composite climbing to fresh all-time highs on improved sentiment.
For the week, all three major indexes posted strong gains -- with the Nasdaq up about 6.8%, the S&P 500 roughly 4.5%, and the Dow over 3%, marking their best weekly performance in months.
Investors are watching geopolitical headlines, expected to drive near-term market direction, while rising oil prices could complicate the inflation outlook and influence expectations for Federal Reserve policy.
