U.S. stock index futures edged higher on Monday, attempting to recover some of last week’s sharp losses, while investors awaited the Federal Reserve’s interest rate decision later in the week.
As of 05:25 ET (09:25 GMT), Dow Jones Futures rose by 145 points, or 0.4%, S&P 500 Futures gained 27 points, or 0.5%, and Nasdaq 100 Futures climbed 113 points, or 0.5%.
Last Week’s Market Losses Amid Escalating Israel-Iran Conflict
The major Wall Street indices sank on Friday, driven by a series of airstrikes between Israel and Iran that intensified geopolitical tensions in the Middle East. The S&P 500 fell 1.1%, the NASDAQ Composite dropped 1.3%, and the Dow Jones Industrial Average slipped 1.8%, resulting in a losing week for all three indices.
Iran-Israel Conflict Escalates
Over the weekend and into Monday, Israel and Iran continued to exchange missile strikes, further ramping up geopolitical uncertainty. Iran informed mediators from Oman and Qatar that it would not engage in ceasefire talks led by the U.S. while Israel is conducting airstrikes, as reported by Reuters.
Israel has warned citizens living near Iranian nuclear facilities to evacuate as the country targets these sites, along with ballistic missile programs, in a series of attacks first launched on Friday. Despite the ongoing conflict, investors appear to be assuming that the situation will not escalate further, particularly with the assumption that Iran will not threaten to close the Strait of Hormuz, a vital shipping channel for global oil supplies.
Focus Shifts to Fed Meeting for Rate Guidance
Looking ahead, the Federal Reserve’s two-day meeting begins on Tuesday, with the central bank widely expected to keep interest rates unchanged at 4.5% by the end of the meeting on Wednesday.
However, the main focus will be on whether the Fed signals any future rate cuts, especially in light of softer U.S. inflation data and signs of a cooling economy. In recent months, soft inflation and signs of a slowing labor market have fueled speculation that the Fed may adjust its policy in the coming months.
The Fed has so far maintained its stance on holding rates steady in the near term, but the outlook could change depending on economic data. Additionally, President Donald Trump has exerted pressure on the central bank to lower rates, which could influence future decisions.
Investors Eye Manufacturing Data
Investors will also be watching manufacturing survey data due later on Monday for more clues on the health of the U.S. economy. The data could offer additional insights into the economic slowdown and help shape expectations for future Fed actions.
G7 Summit in Focus Amid Trade Tensions
Another focal point this week will be the G7 summit in Canada, where leaders from the Group of Seven nations are set to meet. Tensions are high due to President Trump’s imposition of punitive tariffs on imports from many of his allies, creating friction that could impact discussions at the summit. Markets will be watching closely for any developments or agreements made during the summit, particularly on trade and global economic cooperation.
U.S. stock futures are attempting a rebound after last week’s losses, with attention focused on the upcoming Federal Reserve meeting and the G7 summit. Geopolitical risks stemming from the Israel-Iran conflict remain a key concern for global markets, while economic data and central bank actions will be critical in shaping market sentiment in the coming days.