US Stock Futures Fall After Iran Strikes Push Oil Prices Above $90 Per Barrel

US stock futures moved lower Monday after renewed fighting between the United States and Iran pushed oil prices sharply higher. The move increased concern that energy costs could keep inflation elevated and support another Federal Reserve rate increase.

At 9:00 a.m. ET, Dow futures lost 98 points, or 0.18%. S&P 500 futures fell 0.22%, while NASDAQ 100 futures declined 0.14%. Still, all three major indexes approached August’s final session with monthly gains.

Oil Surge Pressures US Stock Futures

US Central Command said American forces struck two Iranian rocket launchers on Larak Island on Sunday. The operation marked the first US attack that officials publicly acknowledged since late July.

Iranian state media reported retaliatory attacks against US bases in Jordan. The renewed exchange raised concern about oil movements through the Strait of Hormuz. The waterway serves as a key route for global energy shipments.

Brent crude climbed above $92 a barrel during European trading, while US crude moved above $86. Higher fuel costs can feed consumer prices and raise operating expenses for transport, manufacturing, and retail companies.

Energy shares advanced before the opening bell. Halliburton gained 2.65%, while Valero Energy rose 2.07%. Chevron, Occidental Petroleum, and Exxon Mobil also traded higher during the premarket session.

Fed Rate-Hike Bets Rise Before Jobs Data

Traders placed a nearly 60% chance on a September rate increase, up from 41.4% one week earlier. Federal Reserve Chair Kevin Warsh strengthened those expectations during his Jackson Hole speech on Friday.

Warsh said recent inflation reports ‘do not tell me that underlying trends have meaningfully improved.’ He added that policymakers may need higher borrowing costs if inflation fails to return toward 2%.

Barclays economist Jonathan Millar said the speech made a September increase more likely. Barclays now expects 25-basis-point increases in September and December, while JPMorgan still expects the first move in December.

Investors will now watch the August employment report on Friday, September 4. Economists expect payrolls to rise by 58,000 after July recorded a 23,000 decline. They expect unemployment to hold at 4.1%.

Wall Street Approaches a Winning August

Despite Monday’s weaker futures, Wall Street entered the final session with broad monthly advances. The Dow gained 2.1% in August and approached its fifth consecutive monthly rise.

The S&P 500 added about 3% during the month, while the NASDAQ Composite gained roughly 4%. Both indexes headed toward their first monthly increases since May. The Dow and S&P 500 also reached records earlier in August.

Technology stocks led the monthly advance. The S&P 500 technology sector gained nearly 6%. Artificial intelligence shares drove that performance. NVIDIA rose more than 8%, Microsoft gained 10%, and Micron Technology advanced 13%.

Premarket trading showed a mixed picture within that trend. NVIDIA added 0.58%, while Intel, Lam Research, and Texas Instruments also rose. Higher oil prices kept pressure on the broader index futures.

Elsewhere, PG&E dropped 16% after California lawmakers rejected a wildfire liability proposal. Pinterest fell more than 3% after announcing a planned chief financial officer change. GameStop gained 3.53% after changing part of its debt exchange to cash.

Asian markets ended mixed, while European shares traded near flat levels. Investors entered September balancing higher oil prices, firm rate expectations, and Friday’s labor-market report through the coming trading week for further policy direction.

Also Read: Oil Prices Extend Losses as Qatar Plans Iran Talks, US Diesel Stocks Hit Seasonal Low