US stock index futures fell on Monday after President Trump rejected an Iranian proposal to end the conflict, a move that sent crude oil prices spiking and pushed Treasury yields to fresh multi-decade highs. S&P 500, Dow, and Nasdaq 100 futures all traded lower as investors weighed the geopolitical shock against a heavy slate of economic data due this week.
US stock index futures dropped on Monday after President Donald Trump rejected an Iranian proposal to end the conflict, a move that sent crude prices spiking and rekindled inflation concerns. At 5:42 a.m. ET, S&P 500 E-minis were down 38 points, or 0.49%, Dow E-minis fell 187 points, or 0.36%, and Nasdaq 100 E-minis dropped 304 points, or 0.98%.
Oil spike revives inflation concerns
Crude prices jumped 3% to around $108 a barrel, reviving worries about inflation. The 60-day rolling correlation between oil prices and Wall Street futures has climbed to its highest level since late May, LSEG data showed, suggesting energy markets and equities are becoming more sensitive to the same macro factors, including the potential economic impact of a prolonged conflict. Those concerns also weighed on Treasuries, sending longer-dated yields to fresh multi-decade highs.
Iran rejects proposal, talks continue
Iran announced a peace proposal at last week's United Nations General Assembly in New York, saying it had been relayed to the United States through Qatari mediators. Trump rejected the offer on Saturday, but he told Axios on Sunday that he expected US negotiators to continue talks this week.
Miners slide as yields climb
US-listed shares of precious metal miners were among the top decliners as elevated yields weighed on non-yielding assets. Gold Fields slid 16% in premarket trading, while Harmony Gold and Endeavour Silver lost 5% and 6%, respectively.
Fed bets and this week's data
Traders are pricing in a 70% chance that the Federal Reserve will hike interest rates by at least 25 basis points back-to-back in October, the CME Group's FedWatch Tool showed. The Personal Consumption Expenditures Index for August and the Non-Farm Payrolls report for September, both due this week, could help investors gauge the path of monetary policy this year. Policymakers Michelle Bowman, Lisa Cook, and Thomas Barkin are due to speak later Monday and could reiterate the hawkish shift in policy since the central bank's previous meeting.
Among individual names, Tesla dipped 1% after J.P. Morgan lowered its price target on the stock, citing weak third-quarter deliveries. Meta eased 2.2% after last week's 13% surge.
Source: Investing.com
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