Dow futures slump; Middle East conflict add to concerns
Investing.com — U.S. stock futures slumped Monday as the escalating conflict between Israel and Hamas added geopolitical risk to concerns over elevated inflation and rising interest rates.
By 06:40 ET (10:40 GMT), the Dow Futures contract was down 135 points, or 0.4%, S&P 500 Futures traded 23 points, or 0.5%, lower and Nasdaq 100 Futures dropped 105 points, or 0.7%.
The main indices on Wall Street closed last week on a high, as investors closed out short positions in the wake of a stronger than expected monthly employment report.
The 30-stock Dow Jones Industrial Average ended Friday almost 300 points, or 0.9%, higher, the benchmark S&P 500 gained 1.2%, while the tech-heavy Nasdaq Composite closed up 1.6%.
However, this positive tone has disappeared after the Israeli-Palestinian conflict escalated to full-blown war over the weekend, as Islamist group Hamas launched an assault on Israel, triggering violent conflict that left hundreds dead.
This resulted in oil prices surging, rebounding from a drop last week, as the strife deepened political uncertainty in the Middle East and exacerbated supply fears.
At 06:40 ET, the U.S. crude futures traded 3.9% higher at $86.00 a barrel, while the Brent contract traded 3.7% higher at $87.69.
This has fueled concerns that a prolonged crude rally will add to inflationary pressures, which could force central banks around the world to leave borrowing costs higher for a longer period of time.
Wall Street was already in a delicate state as investors contended with twin worries over inflation and elevated interest rates. Data last week showed a stronger-than-expected surge in the number of jobs added by the American economy during the month, heaping on to these concerns.
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