Stock market update: Dow, S&P 500, and Nasdaq futures drop

US Stock Futures Tumble Amid Escalating Middle East Tensions

US stock futures experienced another sharp decline early Tuesday after coordinated airstrikes by Israeli and American forces targeted Iran. The intensifying conflict has heightened fears of a broader regional war, unsettling investors.

Futures for the S&P 500 and Dow Jones Industrial Average both dropped by 1.5%. The Nasdaq 100 led the downturn, falling 1.9%, as oil prices surged on concerns over potential supply disruptions.

Markets, which had largely recovered from the initial shock of US-Iran hostilities on Monday, were rattled by the latest wave of attacks. Major US indices managed to rebound from steep losses in the previous session, closing mostly higher as bargain hunters stepped in.

The recent airstrikes in Iran and Lebanon have further escalated the situation, with analysts on Wall Street warning of increased pressure on global financial markets. Attention now turns to how Tehran will respond, especially after Iran targeted oil facilities and other sites across the region, with at least nine countries reporting incidents.

Oil prices continued to climb amid worries that the conflict could disrupt vital shipping lanes and reignite inflation. It was reported that the Strait of Hormuz had been closed, with threats made against ships attempting to navigate the passage.

The conflict entered its third day on Monday following joint US-Israeli strikes that resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei. President Trump suggested the war could last four to five weeks, but acknowledged it might drag on longer, with significant economic repercussions possible both in the US and globally.

Investors are also keeping a close eye on corporate earnings this week. The retail sector is in focus, with Target set to release results on Tuesday, followed by Costco later in the week.

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