Traders were active on the floor of the New York Stock Exchange (NYSE) in New York City as stock futures dipped on Monday evening, driven by ongoing scrutiny of the escalating conflict between Israel and Iran.
Dow Jones Industrial Average futures fell by 199 points, or nearly 0.5%, while S&P 500 futures also decreased by 0.5%, and Nasdaq 100 futures dropped approximately 0.6%. The downward trend followed a post by former President Donald Trump on Truth Social, where he urged, “Everyone should immediately evacuate Tehran.” This statement coincided with a decrease in U.S. stock futures and an increase in West Texas Intermediate crude futures, which rose about 2% in after-hours trading.
On a more positive note, the major stock indices concluded Monday’s regular trading session on an upbeat trajectory, with the Dow gaining over 300 points. The S&P 500 climbed roughly 0.9%, and the Nasdaq Composite surged 1.5%.
Investor confidence was bolstered by falling oil prices, with Brent crude and West Texas Intermediate crude futures both settling more than 1% lower. This marked a significant shift from the rapid increase in oil prices observed on Friday following Israel’s airstrikes against Iran.
As the conflict entered its fourth day on Monday, Iran reportedly reached out to several countries, including Saudi Arabia and Qatar, to urge U.S. President Donald Trump to apply pressure on Israel for a ceasefire, according to a Middle Eastern diplomat who spoke with NBC News. This ceasefire could potentially be linked to Iran’s willingness to show flexibility in nuclear discussions.
Jeff Buchbinder, chief equity strategist at LPL Financial, commented, “[Israel’s] main short-term objective is to neutralize the Iranian nuclear threat. Longer term, the more difficult goal is to effect regime change, though it is not clear whether that will be achievable.” Buchbinder provided insights into past market behavior, noting that although each conflict is unique, an analysis of 25 geopolitical events since the Pearl Harbor attack in 1941 indicated that stocks generally have shown resilience.
He stated that total drawdowns during such events have, on average, reached 4.6% over approximately 19 days. While it typically takes around 40 days for markets to recover to pre-event levels, Buchbinder emphasized that these declines usually represent only brief interruptions of a few weeks to a couple of months.
On the economic calendar for Tuesday, investors are expected to focus on May’s retail sales data. However, the primary event this week will be the Federal Reserve’s decision on monetary policy, scheduled for Wednesday afternoon. Current trading data from Fed funds futures indicates a strong likelihood that the central bank will maintain interest rates within their existing target range of 4.25% to 4.50%, according to the CME FedWatch tool.