US stock futures fell on Monday after a chaotic weekend revived US-Iran tensions and sent oil prices sharply higher. Dow Jones Industrial Average futures dropped 0.4%, while S&P 500 futures and Nasdaq 100 futures also moved down about 0.4%.
The pressure on markets came after the US Navy seized an Iranian ship over the weekend and President Trump said the vessel had a hole blown in its engine room. Iran had fired at vessels and abruptly stopped traffic in the Strait of Hormuz on Saturday, then said the US had broken a ceasefire deal.
The jump in crude underscored why traders were on edge. West Texas Intermediate futures were last up 5.7% at around $87 per barrel on Monday, while Brent crude futures rose 4.7% to near $95. Renewed concern about supply disruptions in the Strait of Hormuz, a critical waterway for oil flows, revived worries that higher energy costs could feed inflation just as markets were already focused on the next round of corporate earnings.
Tesla, Intel and United Airlines were among the major companies due to report in the days ahead, adding another layer of uncertainty for investors trying to assess whether the latest Middle East flare-up will keep pressure on stocks. The Hormuz standoff is one of several sticking points in ongoing US-Iran negotiations and peace talks, and the weekend moves showed how quickly those talks can be put at risk when shipping lanes come under threat.
At the same time, Eli Lilly was in advanced talks to acquire Kelonia Therapeutics for more than $2 billion, according to a report, with a deal possibly coming as soon as Monday. The news helped lift Eli Lilly shares more than 2% in premarket trading on Sunday, a reminder that even with geopolitics driving the open, company-specific deal news was still moving individual names.
For now, the market is being pulled in two directions: higher oil, which threatens inflation, and a steady drip of earnings and deal news that could still support equities if the damage from the weekend proves contained. The next test is whether traders treat the Strait of Hormuz crisis as a brief shock or the start of a broader repricing of risk.