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U.S. stock index futures tumbled sharply on Monday as investors rushed away from riskier assets following a dramatic escalation in the Middle East, after the United States and Israel launched large-scale air strikes against Iran.
By 05:25 ET (10:25 GMT), Dow Jones Futures were down 560 points, or 1.1%, S&P 500 Futures fell 79 points, or 1.0%, and Nasdaq 100 Futures slumped 350 points, or 1.4%, pointing to a steeply lower open on Wall Street.
The selloff follows a weak close on Friday, when U.S. equities declined amid lingering fears over artificial intelligence-driven disruption and concerns that sticky inflation could delay interest-rate cuts.
U.S.-Iran conflict shatters risk appetite
Market sentiment deteriorated sharply over the weekend after U.S. and Israeli forces launched a coordinated wave of air strikes on Iran, killing hundreds, including Supreme Leader Ayatollah Ali Khamenei.
Iran swiftly retaliated, launching attacks on Israel and several U.S.-aligned countries across the Middle East, including Bahrain, Qatar and the United Arab Emirates, raising fears of a widening regional conflict.
U.S. President Donald Trump said on Sunday that military operations against Iran would continue until all “objectives are achieved,” while warning that further American casualties were possible following the deaths of three U.S. service members.
The escalation comes just days after negotiations between Washington and Tehran over Iran’s nuclear enrichment programme ended without a breakthrough, leaving diplomacy in tatters and markets bracing for the prospect of an all-out war in the Middle East.
Investors responded with a classic risk-off move, dumping equities in favor of safe-haven assets amid fears that prolonged conflict could disrupt global energy supplies, fuel inflation, and derail economic growth.
Power shift in Tehran adds uncertainty
Following the killing of Ayatollah Khamenei, Ali Larijani has emerged as one of the most powerful figures in Iran’s leadership. As head of Iran’s security council and a former speaker of parliament, Larijani is expected to play a central role in shaping Tehran’s response, adding another layer of uncertainty for global markets.
With geopolitical risks surging and volatility spiking, investors remain on edge ahead of the U.S. market open, as the fallout from the Middle East conflict continues to dominate global sentiment.
