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Dow, S&P 500, Nasdaq futures tumble as oil prices surge to over $100 a barrel

Rebecca French

U.S. stock futures tumbled on Monday as crude prices soared toward the $100-per-barrel mark on worries about a protracted conflict in the Middle East, but pared losses on hopes that the oil supply crunch would ease.

Dow Jones Industrial Average futures (YM=F) fell 1.2% after plunging more than 1,000 points overnight. S&P 500 (ES=F) and Nasdaq 100 (NQ=F) contracts fell 1% and 1.1%, respectively. In early over-the-counter trading, all three indexes fell more than 2%.

Oil prices surged about 25% to $119 a barrel on Sunday night, reaching their highest level since 2022. The surge in oil prices comes as the conflict with Iran prompts crude producers to cut production, which has been limited by the de facto closure of the Strait of Hormuz shipping corridor. Kuwait confirmed unspecified production cuts, while Iraqi output was reported to be down about 70%.

Ministers from the Group of Seven major economies will meet on Monday to discuss a possible joint release of oil from International Energy Agency reserves amid a supply crunch, according to media reports. The United States and two other countries are said to support the move, which seemed to calm nerves frayed by Trump’s suggestion on Sunday that the high cost was “a small price to pay for security.”

West Texas Intermediate (CL=F) crude futures are trading around $103 a barrel, while global benchmark Brent crude (BZ=F) futures are changing hands above $107 a barrel. Both are about 15% higher.

Stocks suffered a severe sell-off last week, with the Dow Jones Industrial Average (^DJI) down about 3%, its biggest weekly loss since April 2025 when the Trump administration’s tariff concerns roiled markets. The S&P 500 (^GSPC) fell about 2%, and the Nasdaq Composite (^IXIC) closed down more than 1%.

Looking ahead to domestic economic reports, investors will be keeping a close eye on Wednesday’s Consumer Price Index and Friday’s Personal Consumption Expenditure Index readings, although neither index will yet capture the impact of the recent surge in oil prices on price pressures.

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On the corporate front, earnings season continues, with Hewlett Packard Enterprise (HPE) expected to report results after the close on Monday. Oracle (ORCL), Adobe (ADBE) and Dick’s Sporting Goods (DKS) are scheduled to release reports in the coming week.

live 9 updates

  • Global bond rout intensifies as rising oil prices upend interest rate outlook

    Bloomberg reports:

    Global bond markets fell on Monday as an oil price shock prompted investors to consider rising inflation and worsening economic growth prospects.

    The benchmark 10-year Treasury note (^TNX) yield rose more than three basis points to 4.17%, while the policy-sensitive two-year note rate rose four basis points. Traders lowered expectations for the Federal Reserve’s next 25 basis point interest rate cut in September. Traders had fully priced in this move in July, before the war in the Middle East broke out. Bond options show some traders are betting the Fed may not cut interest rates at all this year.

    Moves in Europe and the UK are more aggressive: the swaps mean there is a 60% chance of the European Central Bank raising rates twice this year, while the chance of one hike by the Bank of England before the end of the year is just under 50%. The yield on German two-year government bonds surged 9 basis points to 2.40%, and the yield on British two-year government bonds surged 30 basis points to 4.17%, the largest increase since October 2022.

    Read more here.

  • European blue chips face correction as oil prices soar

    From Bloomberg:

    European blue-chip stocks fell and were set for a correction as rising conflict in the Middle East sent oil prices surging above $100 a barrel, reigniting concerns that inflation could curb economic growth.

    As of 8:47 a.m. in London, the Stoxx Europe 50 index (^STOXX50E) fell 3.1% to 584.56 points, down nearly 10% since its February peak, as the Iran war weighed on stocks. The broader Stoxx Europe 600 (^STOXX) index fell 2.4%.

    Among sectors, mining stocks, banking stocks, retail stocks, construction stocks and tourism and leisure stocks led the decline. Airline stocks fell, with Lufthansa shares down 4.9%. LVMH fell 2.0% as concerns about weak consumer demand weighed on luxury goods stocks. The energy sector outperformed the broader market, with oil majors such as Shell and BP rising 2.1% and 1.3% respectively.

    Europe’s main stock benchmark Stoxx Europe 600 index last week recorded its biggest weekly loss since April. The Middle East conflict enters its tenth day with few signs of easing after Iran appointed the son of the late Ayatollah Ali Khamenei as its new supreme leader and military strikes continued.

    Read more here.

  • Stagflation trade sweeps markets as Trump hints war will expand

    Optimism in financial markets about a speedy resolution to the Middle East conflict is fading fast.

    Bloomberg reports:

    Read more here.

  • G7 discusses joint release of emergency oil reserves

    The Financial Times reports:

    G7 finance ministers will discuss the possibility of a joint release of oil reserves coordinated by the International Energy Agency at an emergency meeting on Monday, aimed at countering a surge in oil prices following the Gulf conflict.

    Ministers and International Energy Agency executive director Fatih Birol will hold a conference call at 8:30 a.m. New York time to discuss the impact of the war with Iran, according to people familiar with the matter, including senior G7 officials.

    Three G7 countries, including the United States, have so far expressed support for the idea, according to people familiar with the matter.

    The IEA’s 32 member countries hold strategic reserves as part of a collective emergency system to deal with the oil price crisis. Some U.S. officials believe a joint release of 300 million to 400 million barrels of oil – 25% to 30% of 1.2 billion barrels of reserves – is appropriate, one person said.

    Read more here (Premium Subscriber)

  • What some people on Wall Street think

    Veteran strategist Chris Rupkey offers the following solid new take on the surge in oil prices.

    I’d say his views are far from the consensus (we’re in recession because of the Iran situation), but we should be on the lookout for comments like this in the coming days:

  • Goldman Sachs weighs in on oil price surge

    Goldman Sachs’ new forecast for oil looks outdated given the sharp swings in oil prices since last night.

  • Soaring oil prices rock global markets, sending Asian stock indexes hard hit

    Key indicators in Asia fell more than 5% as the U.S. and Israel’s war with Iran is seen as causing global instability. The drop in oil prices was driven by a surge in oil prices, which is a potential indicator of a coming recession.

    AP Financial Report:

    Read more here.

  • Gold prices fall as soaring oil prices lead to instability

    Bloomberg reports:

    Read more here.

  • Oil prices top $100 per barrel, fastest rise since the 1980s

    Yahoo Finance’s Jack Conley reports:

    Read more here.

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