U.S. stock index futures fell more than 1% on Monday as an escalation in the Middle East pushed investors toward traditional safe-haven assets ahead of a packed week for U.S. economic data. Oil prices moved higher, gold gained about 2%, and bond prices climbed, with the U.S. 10-year Treasury yield touching an 11-month low during the session.
The market rout followed fresh U.S. and Israeli strikes on Iran that came after weekend attacks that killed Supreme Leader Ayatollah Ali Khamenei. Tehran responded by launching missile barrages across the region, heightening concerns the confrontation could broaden and potentially draw in neighboring countries. A media report cited U.S. President Donald Trump as saying the conflict could last another four weeks, and that attacks would continue until the United States achieves its stated objectives.
Investors shifted toward assets perceived as safer during periods of geopolitical uncertainty. Gold climbed roughly 2%, while sovereign bond prices rose, prompting a dip in the 10-year Treasury yield to its lowest level in about 11 months. Oil prices jumped as markets priced in the potential for supply disruption and a sustained period of higher energy costs.
At 02:20 a.m. ET, futures tied to the major U.S. equity benchmarks showed steep losses: Dow E-minis were down 680 points, or 1.39%; S&P 500 E-minis were down 100.5 points, or 1.46%; and Nasdaq 100 E-minis were down 464 points, or 1.86%.
The geopolitical shock comes at a sensitive time for markets, with a slate of U.S. economic releases due. Manufacturing purchasing managers' indexes for last month were scheduled for later in the day, and key reports later in the week include January retail sales, ADP employment figures and the closely watched non-farm payrolls report. Those data points are likely to influence expectations for economic momentum and policy-setting by the Federal Reserve.
Traders already face the risk that elevated energy prices could feed back into inflation. The piece noted that a prolonged spike in oil would raise the chance of renewed inflationary pressures, at a time when market participants are contending with a recent hot inflation reading that reinforced the view the U.S. Federal Reserve is unlikely to lower its key interest rate in the near term.
February had been a volatile month, with market swings driven by worries about AI-related costs and disruption, renewed tariff concerns, and ongoing geopolitical tensions. Those forces constrained risk appetite: the S&P 500 and Nasdaq logged their sharpest monthly declines since March 2025, while the Dow nevertheless posted a tenth consecutive monthly gain, its longest streak since a 10-month run that ended in January 2018.
Last Friday's session saw financial and technology shares lead a pullback, with the Dow closing down more than 1%, the Nasdaq down 0.9% and the S&P 500 finishing 0.4% lower. The latest moves in futures on Monday extended that risk-off tone as markets awaited the upcoming economic releases and assessed geopolitical developments.