U.S. stock futures moved slightly higher late Sunday as investors balanced two major concerns: the ongoing conflict involving Iran and the upcoming policy meeting by the Federal Reserve.
Futures tied to the S&P 500 climbed 0.4% to 6,709.50 points, while Nasdaq-100 futures also rose 0.4% to 24,700.75 points. Contracts linked to the Dow Jones Industrial Average increased 0.3% to 47,031 points.
Although futures showed modest gains, the broader market had ended the previous week under pressure. Rising oil prices and geopolitical tensions pushed investors toward caution, leading to losses across major Wall Street benchmarks.
During the past week:
- S&P 500 dropped 1.6%
- Dow Jones Industrial Average fell 2%
- NASDAQ Composite declined 1.3%
These declines reflected growing uncertainty about how geopolitical risks and higher energy costs could affect economic growth.
Oil Above $100 Raises Market Risks
A key factor influencing market sentiment is the sharp rise in oil prices. Crude oil surged last week as concerns about supply disruptions intensified during the conflict between the United States, Israel, and Iran.
Brent crude oil climbed above $105 per barrel, while U.S. West Texas Intermediate (WTI) traded near $100 per barrel, marking the highest levels in several years.
Much of the anxiety centers on the Strait of Hormuz, a narrow waterway that normally carries about 20% of the world’s oil supply. Iran has restricted shipping through the route, raising fears that global energy flows could be disrupted.
Recent attacks on oil tankers and energy infrastructure in the region have added to those concerns. Investors worry that if supply problems persist, energy prices could remain elevated and affect businesses and consumers worldwide.
Meanwhile, Donald Trump warned that the U.S. could launch additional strikes on Kharg Island, a facility responsible for most of Iran’s oil exports. Trump also indicated that negotiations to end the conflict have not yet reached a breakthrough.
Inflation Worries Ahead of Fed Decision
The geopolitical tensions have complicated the outlook for monetary policy. Investors are now focusing on the Federal Reserve’s policy meeting scheduled for March 17–18, which could provide important signals about the future of interest rates.
Higher oil prices can push inflation upward because energy costs affect transportation, manufacturing, and everyday goods. If inflation remains high, central banks may be forced to keep interest rates elevated for longer than markets expect.
Investors are watching the Fed meeting closely for several reasons:
- Whether interest rates will remain unchanged
- Signals about future rate cuts later in 2026
- Fed officials’ views on inflation driven by energy prices
- Possible economic slowdown risks from expensive oil
For now, markets expect the central bank to hold rates steady while evaluating how the recent surge in oil prices could affect inflation and economic growth.
With geopolitical risks rising and energy markets volatile, investors are preparing for continued uncertainty across global financial markets.