US pre-open: Futures drop as Middle East conflict sparks oil price surge

2nd Mar 2026 11:39

(Sharecast News) - Sharp falls across European markets and a big jump in the price of oil pushed US stock futures firmly lower on Monday on the back of the rapid escalation of conflicts across the Middle East.

Futures on the Dow and S&P 500 were down 0.9% by 1156 GMT in pre-market deals, while Nasdaq futures fell 1.1%. Stocks fell sharply on Friday on the back of rising speculation about a US attack on Iran, wile an unexpected acceleration in US wholesale inflation hit sentiment.

WTI crude was up 7.0% at $71.73 a barrel early on, hitting levels not seen since last June, after the US and Israel started a war with Iran on Saturday and assassinated the country's leader and several members of his administration.

There are fears of supply disruption as Iran's Revolutionary Guard warned ships not to use the vital Strait of Hormuz - through 20% of the world's oil is transported, along with other commodities.

In turn, safe-haven demand led to 3.1% and 2.6% increases in gold and silver prices on Comex, respectively.

Equity markets had been braced for a fall after airstrikes on Tehran killed Ayatollah Ali Khomenei in a war US President Donald Trump said was aimed at regime change in the Persian Gulf state.

The attacks across multiple provinces sparked a wild reaction from Iran, which fired missiles and drones across the region, hitting US bases in Kuwait and Bahrain, along with other strikes on Israel, Oman, Dubai and the British air force base on Cyprus.

"The Iranian decision to effectively close the Straits of Hormuz through a combination of threats and attacks on tankers does raise the high likeliness of a short-term price spike as supply chains face major disruption. We are yet to see the US and Israel specifically target Iranian oil facilities, providing a nod to the likely plan that the new leadership can export freely to bring prices back down," said Joshua Mahony, chief market analyst at Scope Markets.

"However, the prospect of a sharp rise in oil and gas prices does bring concerns around an inflationary surge, with the CME pricing for a June rate cut easing back this morning."

In equity movements, futures of oil companies Chevron, Exxon Mobil and ConocoPhillips marched higher as the price of crude surged.

While investors will likely keep their eyes firmly pinned on geopolitical developments, the ISM US manufacturing PMI, due out at 1500 GMT, will garner some attention. The PMI is expected to have slipped to 51.8 in February from 52.6 in January.