U.S. stock-index futures showed little movement early Monday, as a fresh surge in oil prices injected caution into markets following last week's record highs. Dow futures edged up 0.01%, S&P 500 futures dipped 0.02%, and Nasdaq 100 futures slipped 0.01%, according to Bloomberg data. The muted open comes after the S&P 500 and Nasdaq both closed at all-time highs on Friday, buoyed by AI-related stocks and a stronger-than-expected U.S. jobs report.
Crude oil prices climbed sharply, with U.S. crude futures jumping approximately 2.3% to $97.64 a barrel in early New York trading. Brent crude hovered near $104 a barrel after President Donald Trump dismissed Iran's response to a U.S. peace proposal, keeping the Strait of Hormuz largely closed. The waterway, which handled about a fifth of global oil and LNG shipments before the conflict began on February 28, remains a critical chokepoint. Trump called Iran's counterproposal "TOTALLY UNACCEPTABLE," while Tehran demanded an end to the U.S. blockade, war reparations, and formal recognition of its control over the strait.
The energy price spike is reigniting inflation worries on Wall Street, particularly ahead of Tuesday's consumer price index (CPI) report, which measures household costs for goods and services. Both BofA Global Research and Goldman Sachs have adjusted their Federal Reserve rate-cut forecasts, citing higher energy costs and a resilient labor market. BofA dropped any forecast for rate cuts this year, while Goldman Sachs moved its expected first cut from September to December. According to Reuters, traders now expect the Fed to keep rates in the 3.50% to 3.75% range through the end of the year.
Airlines were among the early losers in premarket trading, as higher fuel costs weighed on the sector. Southwest Airlines and United Airlines both dropped 1%, while Delta Air Lines and American Airlines edged 0.8% lower. The moves reflect market expectations that pricier jet fuel could pressure margins.
AI and chip stocks offered a mixed picture, providing little direction for futures. Premarket data from Investing.com showed Micron Technology up 2.8%, Intel gaining 6.5%, and Advanced Micro Devices adding 2.2%. However, Nvidia slipped 0.8%, Tesla lost 1.1%, and Microsoft edged down 0.4%. The split follows a strong end to last week, where Nvidia rose 1.8% and both Micron and Sandisk surged over 15%, driven by AI demand for data center memory and storage.
Friday's rally pushed the S&P 500 to 7,398.93, up 0.84%, while the Nasdaq climbed 1.71% to 26,247.08. The Dow Jones Industrial Average managed only a 0.02% gain to 49,609.16. Rob Williams, chief investment strategist at Sage Advisory Services, noted after Friday's close that "this is an economy that seems hard to wreck," pointing to productivity, spending, consumer wealth, and earnings as key supports.
The central question for traders now is whether AI and corporate earnings can continue to absorb the crude oil shock. John Evans at PVM Oil Associates noted that the U.S. and Iran appear "as far away from agreement" as when the ceasefire began, and he does not expect progress until after Trump's trip to China, where Beijing's leverage over Tehran is expected to factor into discussions. The risk, as JPMorgan's global head of economics Bruce Kasman highlighted, is that every week the Strait of Hormuz remains closed increases the chance of a sharper market move. For now, energy prices act as "headwinds rather than expansion-ending obstacles," but a further 50% rise in oil would pose a significant test for markets.
