US equity futures fell sharply on Monday, trading near their lowest levels of the year as the escalating conflict in the Middle East prompted a broad shift away from risk assets. The three major US indices were each down more than 1%.
The move came after the US struck Iran over the weekend, killing its supreme leader and triggering Iranian attacks on multiple targets across the region. Global equities sold off as investors weighed the risk of a prolonged conflict, which further eroded risk appetite. At the same time, a sharp rise in energy prices raised concerns about a renewed pickup in inflation expectations, potentially forcing the Federal Reserve and other major central banks to maintain, or even adopt, more restrictive monetary policy.
Losses in equities were broad-based across most major sectors. Large-cap technology names including Nvidia, Microsoft, Alphabet, and Meta traded lower in premarket activity. Financials were also under pressure, with JPMorgan Chase and Bank of America each down about 2%, as markets continued to focus on vulnerabilities stemming from private credit exposure and recent defaults by major clients. In contrast, North American energy producers rallied strongly, benefiting from the surge in energy prices.