Dow Jones Industrial Average futures popped 450 points on Monday as oil prices and Treasury yields pulled back, with Wall Street looking to recover from a mostly lower week. The rally followed a 3% drop in U.S. crude and easing bond yields, even as fresh hostilities in the Middle East continued over the weekend.
Dow futures popped 450 points, or 0.9%, while S&P 500 futures and Nasdaq-100 futures climbed 0.7% and 1%, respectively. The move follows a rough week for the blue-chip index, which slid 1.7% for its worst performance since March. The S&P 500 was off about 0.1% over the same stretch, while the Nasdaq was the lone gainer, up 0.7%.
Oil and yields pull back after Middle East escalation
Monday's advance came alongside a 3% drop in U.S. crude to $97.09 a barrel, with Brent sliding more than 3% to $100.50. The moves followed an escalation over the weekend, as Iran-backed Houthis said they attacked Saudi Arabia with missiles and drones on Saturday, prompting the U.S. State Department to warn Americans to reconsider travel to the Middle East.
Still, diplomacy could remain on the table. President Donald Trump told Fox News he would probably be open to meeting Iranian President Masoud Pezeshkian during this week's UN General Assembly. Treasury yields eased in step with oil, as the 10-year note shed more than 3 basis points to 4.957%, while the 30-year bond yield fell to 5.294%.
Fed's rate hike keeps inflation risk in focus
The pullback comes a week after the Federal Reserve hiked interest rates for the first time in three years as the U.S. grapples with sticky inflation. According to Ed Yardeni, president of Yardeni Research: "Higher-for-longer energy prices add to the case for further tightening." He added that supply risks remain persistent, pointing to Ukrainian strikes on Russian refineries and sanctions on Russia as further constraints on global fuel supplies, warning that a prolonged energy shock raises the interest rate case for second-round inflation effects.
AI stocks gain ahead of Trump-Xi summit
That backdrop could sharpen the stakes for a summit this week between Trump and Chinese President Xi Jinping, which will cover artificial intelligence, tariffs and critical minerals. AI-related stocks were higher in the premarket Monday, with Intel shares gaining more than 5%, while Dell Technologies and Advanced Micro Devices added more than 2% and 3%, respectively.
Source: CNBC
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