Dow, S&P 500, Nasdaq futures rise, oil falls as markets reverse course after US strikes on Iran

US stock futures turned higher on Monday, with oil prices paring gains as markets grew cautiously optimistic over Iran’s next move after the US entered the Middle East conflict at the weekend.

Futures tied to the S&P 500 climbed 0.3%, while those on the tech-heavy Nasdaq (NQ=F) rose roughly 0.4%. Dow Jones Industrial Average futures edged up 0.1%.

Stocks are reversing course as nerves calm over President Trump’s decision to join Israel’s attacks on Iran. Futures on Wall Street rose and oil jumped over 4% higher in the immediate rush to grapple with the strikes, but the prospect of a selloff is receding as investors assess Iran’s response so far.

“Markets appear to be treating the US strikes on Iran as a contained event for now, rather than the start of a broader war. The muted haven flows suggest investors are still assuming this is a one-off escalation, not a disruption to global oil supply or trade,” Saxo strategist Charu Chanana told Reuters.

Trump said late Saturday that the US had struck Iran’s three main nuclear enrichment facilities, claiming the sites had been “totally obliterated” — a claim that has since been questioned. He threatened Iran with more attacks if the country did not quickly seek peace talks.

The focus now is on Iran’s next step — both militarily and diplomatically. Its foreign minister on Sunday said it reserves “all options,” while its parliament has reportedly voted to block the Strait of Hormuz — though Iran’s leaders have yet to make a final decision.

The spike in crude prices is now unwinding as jitters about disruption to energy supplies ease. Experts are skeptical that Iran will follow through on its threat to close the waterway, through which around one-fifth of global oil and gas flows.

Brent crude futures pulled back on Monday, trading at near $77 a barrel after jumping over $80 after the US strikes. US benchmark WTI crude futures (CL=F) also lost hold of gains, slipping to below $74 a barrel.

Wall Street is watching oil prices closely, given a shock could have ramifications for the US economy, potentially triggering higher inflation that could spur the Federal Reserve to delay interest-rate cuts.

Elsewhere in markets, gold ticked lower amid a softening in the haven demand that has driven this year’s sharp rally.