Wall Street futures trim losses but remain sharply lower as oil stays above $100 amid US-Iran war; S&P 500 down 1%

Wall Street: US Futures

• Wall Street futures remain sharply lower amid oil price surge
• Brent crude jumps 12% to $104 amid Middle East tensions
• Oil rally triggers inflation and stagflation fears, hitting markets

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Wall Street futures trimmed some of their earlier losses on Monday afternoon but remained sharply lower, as crude oil prices held above $100 per barrel amid escalating conflict in the Middle East and fears of a global inflation shock.

S&P 500 futures were down about 1 percent, while Nasdaq 100 futures slipped around 1.1 percent and Dow Jones Industrial Average futures declined roughly 1.1 percent, reflecting persistent risk aversion in global markets.

Earlier in the session, futures had fallen more sharply before recovering slightly after reports that Group of Seven (G7) finance ministers may discuss a coordinated release of emergency oil reserves, which helped ease some pressure in energy markets.

Crude oil prices had surged to their highest levels since 2022 after Gulf producers cut output amid the widening conflict involving the US, Israel and Iran, raising concerns about disruptions to global energy supply chains.

• Also read | 'Think of the unthinkable': As oil surges, IMF chief issues fresh warning on inflation

Brent crude rose about 12 percent to around $104 per barrel, after earlier spikes that briefly pushed prices as high as $119.5, while US crude also traded firmly above $100 per barrel. The oil rally has intensified fears that higher energy costs could fuel inflation and complicate the outlook for global interest rates.

The surge in oil also pushed bond yields higher. The 10-year US Treasury yield rose to around 4.17 percent, reflecting investor concerns that the energy shock could delay monetary policy easing.

Global equity markets also remained under pressure. The Stoxx Europe 600 index fell about 1.6 percent, while the MSCI Asia Pacific index declined nearly 3.7 percent and the MSCI Emerging Markets index dropped around 3 percent.

Investors remain wary that the conflict in the Middle East could become prolonged. Iran recently named Mojtaba Khamenei, son of the late Ayatollah Ali Khamenei, as its new supreme leader, signalling that hardliners remain firmly in control in Tehran.

US President Donald Trump said that higher oil prices were a “very small price to pay” for security, even as markets reacted sharply to the surge in energy costs.

Analysts said the sell-off across equities, bonds and currencies reflected growing fears that the oil shock could trigger an inflation spike and potentially lead to stagflation risks if energy prices remain elevated for an extended period.

The pressure in global markets also weighed on Indian markets, even as benchmarks recovered a large part of the intraday losses. At close, the Sensex was down 1,353 points, or 1.7 percent, at 77,566, while the Nifty fell 422 points to 24,028. Both indices had earlier dropped more than 3 percent during the session.

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