U.S. stock index futures slid more than 1% on Monday as the Middle East conflict showed no signs of cooling, prompting a rush toward safe-haven assets ahead of a busy week of U.S. economic data.
Oil prices jumped, while traditional safe havens rose, with gold climbing roughly 2% and bond prices rallying, sending the U.S. 10-year Treasury yield briefly to an 11‑month low.
Fresh military strikes by the United States and Israel on Iran continued after weekend attacks that killed Supreme Leader Ayatollah Ali Khamenei, prompting Tehran to launch missile barrages across the region and raising fears the conflict could widen and potentially draw in neighbouring countries.
According to a media report, U.S. President Donald Trump said the conflict could stretch on for another four weeks, adding that attacks would continue until the U.S. achieves its stated objectives.
The geopolitical shock comes just as markets brace for a slate of key U.S. economic releases. Manufacturing PMIs for last month are due later in the day, while January retail sales, ADP employment figures, and the closely watched non-farm payrolls report are scheduled for later in the week.
A prolonged spike in oil prices would risk reigniting inflationary pressures, with traders already dealing with a hot inflation reading that fortified expectations that the U.S. Federal Reserve is unlikely to cut its key interest rate in the near term.
At 02:20 a.m. ET, Dow E-minis were down 680 points, or 1.39%, S&P 500 E-minis were down 100.5 points, or 1.46%, Nasdaq 100 E-minis were down 464 points, or 1.86%.
February was a white-knuckle month for markets, with volatility fuelled by uncertainty over AI-related costs and disruption, renewed tariff worries, and simmering geopolitical tension, all of it keeping risk appetite on a tight leash.
The S&P 500 and Nasdaq posted their steepest monthly drops since March 2025. In contrast, the Dow managed to eke out gains for a tenth consecutive month, its longest winning streak since a 10-month run that ended in January 2018.
Last Friday, financial and technology shares led the retreat, with the Dow closing down more than 1%, the Nasdaq off 0.9%, and the S&P 500 ending 0.4% lower.
(Reporting by Pranav Kashyap in Bengaluru; Editing by Sherry Jacob-Phillips)
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