S&P futures declined in early trading on Monday, following heightened tensions between the U.S. and Iran, prompted by the seizure of an Iranian-flagged cargo vessel over the weekend. Futures for the Dow Jones Industrial Average decreased by 254 points, representing a decline of 0.5%. S&P 500 futures declined by 0.4%, mirroring the movement of Nasdaq-100 futures. On Sunday, President Donald Trump announced that the United States had engaged in the firing upon and subsequent seizure of an Iranian-flagged cargo vessel in the Gulf of Oman. This follows Iran’s decision to abstain from participating in an additional series of peace discussions in Pakistan organized by the United States.

The Iranian vessel is subject to U.S. Treasury sanctions due to its previous involvement in unlawful activities. “We have full custody of the ship, and are seeing what’s on board,” Trump stated in a post on Truth Social. Trump additionally issued a threat to demolish all power plants and bridges in Iran should the nation fail to reach an agreement with the United States. This week marks the expiration of the ceasefire between the two countries. Crude prices experienced a notable increase in early trading. West Texas Intermediate futures surged 8% to $90.54 per barrel. International Brent advanced 6% to $96.50. Wall Street is emerging from a successful week, as the S&P 500 and Nasdaq Composite reached unprecedented highs following a ceasefire between Iran and Lebanon.

At that moment, Iran announced the reopening of the Strait of Hormuz; however, by Saturday, vessel traffic through this crucial shipping lane faced restrictions once more, with state media reporting that the U.S. “did not fulfill their obligations.” Trump has emphasized that the U.S. blockade of the strait will persist until Iran complies with U.S. demands, notwithstanding the declarations from Iran. Last week, the S&P 500 experienced a gain of 4.5%, whereas the Nasdaq Composite saw an increase of 7.2%. On Friday, the latter recorded its 13th consecutive winning session, a streak that has not been observed since 1992.

“Following a 13-day rally in the Nasdaq driven by optimism surrounding a potential deal, we concluded the week in a state of short-term overbought conditions. “And now the situation with Iran has become even more complicated and uncertain regarding when this conflict will conclude and when the Strait will fully reopen without the threat of attack,” Peter Boockvar communicated in an email. “The only question with Monday trade, assuming news doesn’t change again, will be the extent of the market pullback,” he added.