U.S. Stock Futures Fluctuate Amid Iran Conflict and Tech Selloff

The global financial landscape is navigating a period of heightened volatility, driven by geopolitical tensions and economic indicators. U.S. stock-index futures have shown mixed movements, reflecting investor uncertainty following a significant tech selloff and escalating conflicts in the Middle East.

On Sunday, U.S. stock-index futures initially dropped but later recovered some losses. The Dow Jones Industrial Average futures saw a decline of about 73 points, or 0.1%. Similarly, the S&P 500 and Nasdaq-100 futures were down around 0.1%, erasing earlier sharp declines. Meanwhile, Bitcoin experienced a rise of more than 2%, trading below the $63,000 level, despite a 14% drop over the past five days.

Geopolitical Tensions and Oil Prices

The recent escalation in the Middle East has significantly impacted global markets. Iran reportedly launched a barrage of missiles at Israelfollowing Israeli airstrikes on Beirut targeting Iranian-backed Hezbollah. Most of the Iranian missiles were intercepted, and there were no reported injuries. This marks the first Iranian attack against Israel since the cease-fire agreement took effect in early April.

Oil prices have surged in response to these developments. West Texas Intermediate crude prices jumped more than 2%, nearing $93 a barrel, after settling around $90 a barrel on Friday. The escalation could further complicate ongoing negotiations to end the war and reopen the strategic Strait of Hormuz.

Market Reactions and Economic Indicators

Wall Street is bracing for trading to restart on Monday following Friday’s selloff, which saw the tech-heavy Nasdaq Composite suffer the largest single-day point drop in its history, tumbling more than 1,121 points, or 4.2%. The S&P 500 fell 2.6%, its worst drop since October, and the Dow Jones Industrial Average declined 1.4%. All three major indexes declined for the week, as the S&P 500 snapped a nine-week winning streak.

The selloff was sparked by a surprisingly strong May jobs report, which raised expectations that the Federal Reserve will raise interest rates later this year. This would make tech companies’ massive capital spending on AI infrastructure even more expensive. Treasury yields spiked, with the 10-year Treasury yield hitting a two-week high while the policy-sensitive 2-year Treasury surged to its highest level since February 2026.

Shifts in Market Narratives

The spring rally has been led by AI-related chip stocks such as Micron and Broadcomwhich both saw sharp declines on Friday. Some analysts cited Friday’s meltdown as a return to the rotation trade seen earlier this year, out of tech stocks and into a broader selection of industries, including healthcare, financials, and consumer staples, as the narrative shifts back toward inflation worries.

Stephen Innesmanaging partner at SPI Asset Managementnoted that markets are gradually moving away from a world where investors debate growth and toward a world where they debate the cost of growth. This distinction may end up defining the second half of the year.