S&P Futures experienced a significant decline at the beginning of the week, coinciding with a surge in U.S. oil prices due to the ongoing U.S.-Iran conflict. This development has heightened concerns that escalating energy costs may substantially hinder the U.S. economy. The Dow Jones Industrial Average has experienced its most significant weekly decline in almost a year. Futures associated with the Dow experienced a decline of 489 points, equivalent to 1%, by 5:50 a.m., reducing earlier losses that had seen them drop by more than 1,000 points. S&P 500 futures declined by 0.9%, while Nasdaq 100 futures experienced a decrease of 1%.

West Texas Intermediate crude experienced a notable increase of 9%, reaching $99.73 per barrel, after peaking at $113 earlier. This marks the first instance of surpassing the $100 threshold since 2022, a period characterized by investor responses to the consequences of Russia’s invasion of Ukraine. International benchmark Brent crude experienced an increase of 11.5%, reaching a price exceeding $103.37 per barrel. At the outset of the year, U.S. oil prices were recorded at levels beneath $60 per barrel. Oil futures experienced a significant increase on Sunday night following substantial production cuts by major Middle East producers, attributed to the ongoing closure of the crucial Strait of Hormuz passageway. Kuwait has announced reductions, although the specific amounts remain unspecified, whereas Iraq has reportedly experienced a 70% decline in its production levels.

The $100 oil level was perceived by many on market as a critical threshold for the economy, contingent upon a swift resolution to the war and a subsequent decline in prices. On Sunday evening, Trump stated that an increase in “short term oil prices” was a “very small price to pay” for the elimination of Iran’s nuclear threat. The conflict exhibited minimal indications of abating, notwithstanding Trump’s assertion that it was “already won,” as Iran appointed Ayatollah Khamenei’s son, Mojtaba, as its new supreme leader, according to reports. Sunday’s movements come after a challenging week on market, as the conflict between the U.S. and Iran resulted in a surge in crude prices. U.S. crude experienced a remarkable increase of over 35% last week, representing its largest weekly gain since the inception of the futures contract in 1983. The Dow experienced a decline of approximately 3% last week, marking its most significant weekly drop since the initial tariff announcement by President Donald Trump, which unsettled markets in early April 2025. The broad S&P 500 experienced a decline of 2%, whereas the Nasdaq Composite concluded the week with a decrease of 1.2%.

“Markets are clearly jittery as the impact, and duration, of the war in the Mideast are very uncertain, with a potentially wide range of outcomes for economies and important market influences,” Rick Rieder noted to clients on Friday. “These events are generating significant fluctuations in certain market segments as participants evidently seek to decrease their overweight positions or hedge against inherent risks.” While Monday lacks significant economic data, investors will closely monitor upcoming releases related to inflation, employment, and gross domestic product throughout the week. Investors will keep a close eye on the earnings report from Hewlett Packard Enterprise after the market closes on Monday, with subsequent reports from Kohl’s, Oracle, Dollar General, and Dick’s Sporting Goods scheduled for later in the week.