U.S. equity futures moved lower Monday evening as renewed military actions involving the United States and Iran around the Strait of Hormuz coincided with investor caution ahead of several major second-quarter earnings reports and a key inflation release.
By 19:23 ET (23:23 GMT), S&P 500 futures were down 0.2% at 7,548.25 points. Nasdaq 100 futures dropped 0.3% to 29,386.25 points, while Dow Jones futures eased 0.17% to 52,672.0 points.
The weakness in futures followed a negative trading session on Wall Street in which technology names - and chipmakers in particular - suffered sizable declines amid rising questions about extended valuations tied to artificial intelligence optimism. Several leading chipmakers are scheduled to report quarterly results this week, heightening focus on the sector.
Geopolitical escalation in the Gulf
U.S. Central Command said it had launched additional strikes against Iranian targets Monday evening. Those actions occurred hours after President Donald Trump announced that a U.S. naval blockade on Tehran was once again in effect and said vessels would be charged a 20% fee for U.S. protection in the waterway.
The Strait of Hormuz has become the focal point of the latest U.S.-Iran hostilities after Iran attacked several ships trying to transit the channel, prompting military responses from Washington. Iran has maintained that vessels must follow routes it approves and has struck several cargo vessels in the area in the past week.
Energy markets react
Oil prices climbed nearly 10% amid the most recent developments, keeping markets sensitive to the prospect of energy-driven inflation and its potential impact on interest rates.
Earnings and inflation data in focus
Investors next face a concentrated set of scheduled releases. A number of major U.S. banks will report results on Tuesday, marking the formal start of the second-quarter earnings season in earnest. The institutions reporting include JPMorgan Chase & Co (JPM), Bank of America Corp (BAC), Goldman Sachs Group Inc (GS), Wells Fargo & Company (WFC), and Citigroup Inc (C). Market participants will be watching corporate profit trends amid ongoing economic and geopolitical disruptions.
Also due on Tuesday is the consumer price index reading for June. That inflation print is expected to be a significant input to interest rate expectations. The release arrives amid talk that the Federal Reserve may keep rates steady or even raise them by year-end. Earlier in the day, Fed Governor Christopher Waller said the central bank may need to raise rates soon if inflation persists well above its 2% annual objective.
Market breadth and sector pressure
On Monday, the NASDAQ Composite fell 1.55%, a move led by declines among major chipmakers, as investors took gains and reduced exposure to the sector. The S&P 500 dropped 0.8% while the Dow Jones Industrial Average fell 0.26%.
Two chipmaking bellwethers, ASML Holding NV (ASML) and TSMC (TSM), will publish second-quarter results this week and are expected to be closely monitored for signals about demand and margins across the semiconductor supply chain.
With geopolitical tensions, a sharp move higher in oil and a cluster of critical economic and corporate data, markets entered the week with heightened caution. Traders and investors will be weighing incoming corporate earnings and the CPI print alongside developments in the Gulf as they reassess risk and potential implications for inflation and monetary policy.