Nasdaq 100 and S&P 500 Futures Slide as Oil Surge Revives Middle East Risk

What to Know

• U.S. stock futures fell Monday morning after the U.S. confirmed strikes on Iran’s Larak Island in the Strait of Hormuz over the weekend.
• Iranian state media said Tehran retaliated with attacks on U.S. bases in Jordan.
• Dow Jones Industrial Average futures were down 111 points, or 0.21%, at 53,473, while S&P 500 futures fell 22.25 points, or 0.29%, to 7,699.75.
• Nasdaq-100 futures lost 76.00 points, or 0.26%, to 29,415.75 as technology shares faced renewed pressure from higher yields.
• WTI crude traded above $86 per barrel, up more than 3%, while Brent rose above $91, also up more than 3%.
• Energy stocks gained, with Halliburton, Chevron, Valero, Occidental Petroleum and Exxon Mobil higher in premarket trading.
• The 10-year Treasury yield rose more than 3 basis points to 4.754%, the highest since January 2025, while the 30-year yield rose more than 4 basis points to 5.255%.
• PG&E dropped 16% after California lawmakers blocked a proposal to limit wildfire-liability damages against utilities.
• Friday’s August employment report is the next major macroeconomic test for the rate outlook and risk appetite.

Stock Futures Retreat as Geopolitical Risk Returns

U.S. equity futures opened the week under pressure as geopolitical risk returned to the center of market pricing. The weekend confirmation of U.S. strikes on Iran’s Larak Island, a strategically important location in the Strait of Hormuz, pushed crude oil sharply higher and prompted traders to reassess the risk premium attached to energy supply. Iranian state media said Tehran responded with attacks on U.S. bases in Jordan, adding to the risk-off tone across equity index futures.

The move marks the first publicly acknowledged U.S. strike on Iranian positions since late July, and it arrived at a delicate moment for markets. Stocks had entered the final stretch of August with strong monthly gains, but the combination of higher oil prices, rising long-term Treasury yields and a pending employment report created a less forgiving backdrop for growth-sensitive shares. Technology-linked futures were lower, while energy shares were among the clear beneficiaries of the move in crude.

At the opening, Dow Jones Industrial Average futures were down 111 points, or 0.21%, at 53,473. S&P 500 Index futures were off 22.25 points, or 0.29%, at 7,699.75. Nasdaq-100 Index futures lost 76.00 points, or 0.26%, to 29,415.75. The declines were not extreme, but they reflected a market that has become more sensitive to any development capable of tightening financial conditions or lifting inflation expectations.

Oil Rally Lifts Energy Shares but Weighs on Broader Sentiment

Larak Island’s location in the Strait of Hormuz gave the oil market a clear reason to rebuild geopolitical risk premium. WTI crude traded above $86 per barrel Monday morning, up more than 3%, while Brent moved above $91, also up more than 3%. The rebound followed a prior week in which crude lost more than 4% as traders removed some war premium from prices. Monday’s action showed that the same premium can return quickly when supply routes in the region come back into focus.

The reaction across energy equities was immediate. Halliburton was up more than 2.5% in premarket trading, Chevron added 2%, and Valero and Occidental Petroleum were both higher by about 2%. Exxon Mobil gained more than 1.5%. The buying was broad across the group, and Chevron’s rise gave the Dow direct exposure to the strength in oil-linked shares.

Still, energy strength was not enough to lift the wider market. Higher crude can support producers and refiners, but it can also raise concerns about input costs, consumer spending pressure and inflation persistence. That distinction mattered Monday. The energy trade was positive, but the rest of the market leaned lower as investors weighed whether a fresh oil shock could complicate the rate outlook.

S&P 500 Futures Hold Near a Key Former High

September E-mini S&P 500 Index futures were trading just above the former record high at 7,693.75. For technical traders, that level is important because a former top can become a new support zone if buyers defend it. Holding above 7,693.75 would suggest market participants are attempting to convert prior resistance into a floor during a more volatile tape.

The next key downside marker is the main bottom at 7,657.75. A trade through 7,657.75 would reaffirm the downtrend that began on August 18, when sellers took out 7,724.25. On the upside, the new secondary lower top stands at 7,782.50. A trade through that level would shift the trend back to up, based on the technical structure being watched by chart-focused participants.

If sellers push futures below 7,657.75, additional support sits at the 50-day moving average at 7,603.14 and an intermediate 50% level at 7,581.25. Those levels may become important if higher oil and rising yields continue to pressure the market. For now, the S&P 500 futures contract is positioned near a decisive area, with traders focused on whether buyers can defend the former record high.

Nasdaq-100 Tests Its 50-Day Moving Average

The September E-mini Nasdaq-100 Index futures contract was sharply lower at the cash market opening and was straddling its 50-day moving average at 29,411.40. That indicator is a widely followed gauge of medium-term momentum, and trader reaction around it could help set the tone for the week.

A sustained move above the 50-day moving average would indicate the presence of buyers. Under that scenario, a recovery could develop toward potential resistance at 29,610.75, 29,645.00, 29,809.75 and the minor swing top at 29,811.50. The path may not be smooth, particularly with long-term yields moving higher, but reclaiming the moving average would be a constructive first step for bulls.

A sustained move under the 50-day moving average would signal that sellers remain in control. That could extend pressure toward an intermediate 50% level at 29,150.75, followed by the main bottom at 28,946.75. With the technology sector coming off a strong August, the Nasdaq-100 has more to prove if macro conditions continue to tighten.

Yields Add Pressure to Growth Stocks

The bond market added another layer of pressure Monday. The 10-year Treasury yield rose more than 3 basis points to 4.754%, its highest level since January 2025. The 30-year yield gained more than 4 basis points to 5.255%, while the 2-year yield was little changed near 4.34%. The long end of the curve remained the main source of strain for equity valuations.

Higher long-term yields tend to weigh most heavily on growth stocks because they increase the discount rate applied to future earnings. That dynamic is especially relevant for technology stocks, which had been a major driver of the market’s August advance. The S&P 500 technology sector gained nearly 6% during the month, while Nvidia added more than 8%, Microsoft rose 10% and Micron climbed 13%.

The Treasury Department had attempted earlier in the month to calm the bond market with larger debt repurchases, but the effect did not last. Comments from Warsh on Friday also kept rate concerns alive, as he said better summer inflation readings did not prove the underlying trend had improved. Barclays economist Jonathan Millar called a September rate increase more likely than not after the speech, and the firm also expects a December hike.

Strong August Gains Meet a Tougher Macro Backdrop

The latest futures selling comes after a strong August for major U.S. equity benchmarks. The Dow is up 2.1% for the month and is on track for a fifth straight monthly gain. The S&P 500 is up about 3%, and the Nasdaq Composite is higher by roughly 4%. Both the Dow and S&P 500 hit record highs earlier in August.

Those gains may make the market more vulnerable to short-term profit-taking when new risks emerge. A renewed oil premium, firmer Treasury yields and uncertainty ahead of the August employment report create a different setup from the one that supported stocks earlier in the month. Investors are now weighing whether the rally can absorb another round of pressure from rates and commodities.

Global markets offered a mixed backdrop. Japan’s Nikkei 225 slipped 0.14%, and Australia’s S&P/ASX 200 fell 0.18%. South Korea’s Kospi gained 0.46% after reversing an earlier loss. Mainland China’s CSI 300 rose 0.35%, while Hong Kong finished flat. In Europe, trading was mixed, with energy shares higher alongside crude. U.K. markets were closed for a public holiday.

Company Movers Show a Split Market

Single-stock moves underscored the uneven tone across the market. PG&E dropped 16% after California lawmakers blocked a proposal to limit wildfire-liability damages against utilities. The move signaled renewed investor concern over legal exposure and potential future costs for the utility sector in California.

Pinterest fell more than 3% after disclosing that Chief Financial Officer Julia Brau Donnelly will leave at the end of October. Aon lost 1.8% on a $17 billion deal to buy USI Insurance Services from KKR. Those declines added to the broader sense that investors were being selective and cautious outside the energy complex.

There were pockets of strength. GameStop gained 4% after preliminary second-quarter results showed higher operating income despite lower sales. Deere added 1% after Baird upgraded the stock on expectations for stronger farm-equipment demand. The split between gainers and losers reinforced a market focused on stock-specific catalysts, even as macro forces dominated the index-level conversation.

Jobs Report Becomes the Next Major Test

Friday’s August employment report is the next major scheduled data point that could influence the rate outlook. Until then, traders are likely to keep watching oil prices, Treasury yields and the technical levels in S&P 500 and Nasdaq-100 futures. A hotter labor market reading could strengthen expectations for tighter policy, while a softer result could provide relief if it eases pressure on yields.

For now, the market does not need every rate-hike expectation to be realized for stocks to remain under pressure. Higher oil and higher long-term yields are already enough to challenge equity valuations, especially in technology. Monday’s close around 7,693.75 and 7,657.75 for S&P 500 futures, and around 29,411.40 for Nasdaq-100 futures, may help define whether the pullback remains contained or gains momentum into the rest of the week.

Frequently Asked Questions (FAQs)

Why did U.S. stock futures fall Monday?

U.S. stock futures fell as confirmed strikes on Iran’s Larak Island lifted crude oil prices and revived concern about Middle East supply risk. Rising long-term Treasury yields also pressured broader equity sentiment.

Why is Larak Island important for oil markets?

Larak Island sits in the Strait of Hormuz, a strategically important energy transit area. Developments there can quickly lead traders to add a war premium to crude prices because of potential supply-route concerns.

How much did crude oil rise?

WTI crude traded above $86 per barrel, up more than 3%, while Brent traded above $91, also up more than 3%. The move followed a prior week in which crude lost more than 4%.

Which energy stocks gained?

Halliburton rose more than 2.5% in premarket trading, Chevron added 2%, Valero and Occidental Petroleum were both higher by about 2%, and Exxon Mobil gained more than 1.5%.

What levels matter for S&P 500 futures?

September E-mini S&P 500 futures were trading just above the former record high at 7,693.75. Key support sits at 7,657.75, followed by the 50-day moving average at 7,603.14 and an intermediate 50% level at 7,581.25.

What level matters for Nasdaq-100 futures?

September E-mini Nasdaq-100 futures were straddling the 50-day moving average at 29,411.40. A sustained move above that level would point to buyers, while a move below it would signal continued selling pressure.

Why are Treasury yields important for tech stocks?

Higher Treasury yields can pressure technology and growth stocks because they raise the discount rate applied to future earnings. That makes long-duration equity valuations more sensitive when yields rise.

What happened to PG&E shares?

PG&E dropped 16% after California lawmakers blocked a proposal to limit wildfire-liability damages against utilities. The move renewed concern about the company’s potential legal and financial exposure.

What is the next major economic event for markets?

Friday’s August employment report is the next major macroeconomic event. It could influence expectations for interest rates and help determine whether pressure on stock index futures continues.

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