S&P 500 futures experienced a slight dip early Monday as concerns grew over a potential deal between the U.S. and Iran to reopen the Strait of Hormuz. Traders are also anticipating crucial inflation data this week.
The market is coming off a strong week, with the S&P 500 hitting a record close, boosted by a weaker-than-expected jobs report that increased hopes for a pause in Federal Reserve rate hikes. Geopolitical tensions and upcoming economic indicators remain key focus areas for investors.
New York, NY – S&P 500 futures edged lower early Monday, with traders closely watching geopolitical developments surrounding the Strait of Hormuz and upcoming inflation data. Growing doubts about a swift deal between the U.S. and Iran to reopen the critical waterway are tempering market optimism.
Futures tied to the broad S&P 500 index were flat, while Nasdaq-100 futures added 0.2%. Dow Jones Industrial Average futures shed 58 points, or 0.11%. In Asia, the Nikkei 225 added over 0.54%, while the Topix was marginally higher. The Kospi gained 0.53% and the small-cap Kosdaq advanced 1.48%. Australia's benchmark S&P/ASX 200 was 0.54% higher.
Investor sentiment was dampened over the weekend after Iran denied engaging in direct negotiations with the U.S. regarding the Strait of Hormuz. This follows comments last week from Treasury Secretary Scott Bessent to CNBC that suggested a deal was imminent. However, President Donald Trump told Axios on Sunday that the U.S. was "only semi-negotiating" and aimed to exert economic pressure on Iran.
WTI crude oil rose 1% to just above $79 a barrel on Sunday, reflecting the ongoing tensions. Last week, the three major U.S. stock indexes concluded their best weeks since April, with the S&P 500 reaching an all-time closing record. This rally was partly fueled by Friday's July nonfarm payrolls report, which indicated an unexpected contraction in jobs, bolstering hopes that the Federal Reserve might hold off on interest rate hikes. Fed funds futures now price in a roughly 44% likelihood of a September rate hike, down from 67% a week prior, according to CME's FedWatch tool.
"The stock market is likely to welcome the dovish implications of the [jobs] report," said Peter Graf, investing chief at Amova Asset Management Americas. "But, investors should be wary of the future growth potential of an economy where fewer people are working."
Looking ahead, investors will closely monitor consumer and producer price index readings this week for the latest inflation insights. No major economic reports are scheduled for Monday.
Earnings reports from consumer-facing companies like On Holding and Cava Group, as well as technology firms including Super Micro and CoreWeave, will also be on the radar this week.
In other market news, European stocks opened broadly flat. The pan-European Stoxx 600 index was trading at the flatline, with regional bourses and sectors showing mixed performance. London's FTSE 100 was 0.1% lower, France's CAC 40 was flat, and Germany's DAX added 0.1%. Tech stocks and miners led gains, while autos and media stocks lagged.
Shares of Australian rare earth miner Sunrise Energy Metals soared as much as 29% after the U.S. Department of War announced a conditional $400 million loan commitment for its scandium operations. Gold prices remained flat, hovering around seven-week highs after a stronger performance on Friday attributed to the weaker U.S. jobs data.
Oil prices saw an increase, with Brent crude futures gaining 1.04% and WTI futures advancing 0.83%. This rise is linked to the persistent uncertainty surrounding the Strait of Hormuz and ongoing disruptions to Red Sea supply routes.
