U.S. stock index futures declined on Sunday evening as the conflict in the Middle East appeared to intensify, with Yemen’s Houthi group joining the fighting and contributing to a rise in oil prices that unsettled risk-oriented markets. Later remarks from President Donald Trump indicating ongoing negotiations with Iran provided only limited relief to futures.
By 21:50 ET (01:50 GMT) S&P 500 Futures were down 0.45% at 6,383.25 points, while Nasdaq 100 Futures fell 0.5% to 23,200.0 points and Dow Jones Futures slipped 0.5% to 45,204.0 points.
Markets were responding to a series of developments that reinforced investor concern about a widening regional conflict. Yemen’s Houthis, an Iran-backed armed organization, attacked Israel, creating the prospect of a new front to the fighting because the Houthis have the capability to conduct strikes in the Red Sea. That prospect, market participants said, heightened the risk of supply disruptions.
Oil responded quickly to the heightened geopolitical risk. Brent crude jumped more than 3% on Sunday evening, climbing past $115 a barrel as traders priced in the potential for continued disruptions to flows linked to the Iran conflict.
President Trump, speaking to reporters on Sunday evening, said negotiations with Iran were ongoing and that a deal "could be soon," while also acknowledging that a deal might not be reached. "I think we’ll make a deal with them, but it’s possible we won’t… I do see a deal with Iran, could be soon," he said. The president did not provide a concrete timeline for any agreement. Tehran, according to available reports, has repeatedly rejected direct talks with the U.S. since the war began in late February.
In addition to geopolitical developments, markets were still absorbing fresh headlines related to possible aggressive actions being considered by the United States. Reports indicated discussions about seizing Iranian oil and operations to remove Iran’s uranium, with the latter and the former described as measures that would likely require ground incursions to carry out. Those reports added to the risk backdrop and were part of the range of factors driving investor unease.
The slide in futures followed a sharply negative Friday on Wall Street, when indexes finished well off recent highs amid persistent concerns about the Iran war and a renewed, deep selloff in technology shares. The S&P 500 had fallen 1.7% on Friday to 5,368.85 points. The NASDAQ Composite dropped 2.2% to 20,948.36 points, and the Dow Jones Industrial Average fell 1.7% to 6,368.85 points.
Technology sector weakness was a notable feature of the selling. Chipmakers came under pressure after a prominent chip designer unveiled a new AI server, feeding concerns about heightened competition within key AI hardware suppliers. Nvidia Corporation (NASDAQ:NVDA) was pressured by those developments and slid more than 2% in the session following the announcement.
Major social-media and search companies also weighed on the market after an adverse court ruling. Meta Platforms Inc (NASDAQ:META) and Alphabet Inc (NASDAQ:GOOGL) recorded extended losses after a U.S. court found both companies liable in a social media addiction trial.
Taken together, the broadened geopolitical risk and renewed technology sector selling left risk appetite frayed and contributed to a fifth straight week of losses for major Wall Street indexes.
Market implications
- Energy and oil markets reacted to heightened geopolitical risk, with Brent over $115 a barrel and a more than 3% jump on Sunday evening.
- Technology and chip-related names remained under pressure amid competitive concerns in AI hardware and an adverse court ruling affecting major social-media and search companies.
- Overall risk sentiment weakened, leaving futures and major indexes lower following a deep selloff at the end of the prior trading week.
What to watch next
- Further statements from political leaders about talks with Iran and any confirmed diplomatic progress or setbacks.
- Developments in the Red Sea region and any indications of expanded maritime or regional strikes that could affect oil shipping and supply.
- Earnings, court rulings, and product announcements in the technology and semiconductor sectors that could influence the ongoing rotation out of high-growth names.