U.S. stock futures extended their losses early Monday as renewed fighting between the United States and Iran kept global markets under pressure.
Investors also turned their attention to a busy week of second-quarter earnings reports from major banks, semiconductor companies and technology firms.
U.S. Stock Futures Move Lower
S&P 500 futures fell 0.6% to 7,577.50 points by 02:19 ET, or 06:19 GMT.
Nasdaq 100 futures declined 1.4% to 29,602.75 points, pointing to heavier losses among technology shares.
Meanwhile, Dow Jones futures slipped 0.26% to 52,768 points.
U.S. and Iran Exchange Fresh Strikes
The United States and Iran launched further attacks over the weekend, showing few signs that the conflict was moving towards a resolution.
U.S. Central Command said it had carried out additional strikes against Iran. Separate reports indicated that Tehran responded by targeting American military bases across the Middle East.
The latest escalation followed comments from President Donald Trump last week that the ceasefire with Iran had ended.
However, Trump also said Iranian officials had made contact in an effort to resume talks.
Conflicting Claims Surround the Strait of Hormuz
The United States and Iran issued conflicting statements about the status of the Strait of Hormuz.
Tehran said the vital shipping route had been closed to commercial vessels.
In contrast, U.S. Central Command said the waterway remained open.
The uncertainty surrounding the strait increased concerns about global oil supplies because the route is critical for international energy shipments.
Oil Prices Rise on Supply Fears
Oil prices climbed sharply following the latest military attacks.
The increase renewed concerns that higher energy costs could add to inflation and influence Federal Reserve policy.
Persistent oil-price pressure may encourage the Fed to maintain higher interest rates or adopt a more hawkish approach in the coming months.
Despite Monday’s gains, Brent crude remained below the highs reached during the early stages of the U.S.-Iran conflict.
Technology Stocks Face Heavy Pressure
The larger decline in Nasdaq futures suggested that technology stocks could face significant selling pressure when Wall Street opened.
Weakness across Asian semiconductor shares appeared likely to spread into U.S. markets.
Profit-taking and concerns about elevated artificial intelligence valuations also weighed on sentiment.
SK Hynix Leads Asian Chip Sell-Off
SK Hynix shares fell as much as 14% during trading in Seoul.
The sharp decline followed the company’s strong Nasdaq debut on Friday, when its American Depositary Receipts gained almost 13%.
However, investors took profits on Monday as concerns returned over whether AI-driven semiconductor valuations had risen too far.
The decline in SK Hynix also dragged other Asian chipmakers lower.
TSMC and ASML Earnings in Focus
Investors remained cautious ahead of second-quarter earnings reports from semiconductor industry leaders TSMC and ASML.
Both companies are scheduled to publish their results in the coming days.
TSMC is the world’s largest contract chip manufacturer, while ASML supplies advanced lithography equipment used in semiconductor production.
Their earnings and forecasts could provide important signals about global chip demand and artificial intelligence spending.
Major Banks Begin Q2 Earnings Season
The second-quarter earnings season will begin in earnest this week with results from several major U.S. banks.
JPMorgan Chase, Bank of America, Goldman Sachs, Wells Fargo and Citigroup are scheduled to report on Tuesday.
Morgan Stanley and Bank of New York Mellon will release their results on Wednesday.
Investors will closely examine trading revenue, lending activity, credit quality and management guidance.
Netflix, GE Aerospace and Healthcare Giants to Report
Several major companies outside the banking sector will also report earnings later this week.
The list includes Johnson & Johnson, UnitedHealth Group, GE Aerospace and Netflix.
Their results could show whether corporate profits remained resilient despite higher energy prices, geopolitical uncertainty and wider economic disruption.
Wall Street Awaits Corporate Guidance
U.S. stock indexes finished higher on Friday.
The Nasdaq Composite and Dow Jones Industrial Average each gained around 0.3%, while the S&P 500 remained close to a record high.
However, renewed Middle East tensions and weakness in semiconductor stocks have changed the market mood.
Investors will now focus on whether major companies can maintain earnings growth while dealing with the economic effects of the Iran conflict and rising oil prices.
