NEW YORK — U.S. stock index futures fell on Monday after renewed tensions surrounding the Strait of Hormuz unsettled investor sentiment, with officials citing fresh disruptions to the critical oil shipping route over the weekend.
Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 all declined in early trading, according to market data and media reports, reversing gains from the previous week’s rally. The downturn followed developments involving Iran and the United States that raised concerns about energy supply and regional stability, officials and analysts said.
Oil prices rose sharply in response to the renewed uncertainty. Brent crude and U.S. West Texas Intermediate both climbed by several percentage points, reflecting fears of supply disruptions through the Strait of Hormuz, a key passage for global oil shipments, market participants said.
The market reaction came after Iran moved to reimpose restrictions on shipping through the strait, reversing earlier signals that it would remain open, according to officials and state media reports. The United States also confirmed it had seized an Iranian-flagged cargo vessel in nearby waters after it allegedly ignored warnings, further escalating tensions.
“Our military is prepared to respond to threats to freedom of navigation,” a U.S. official said, referring to the seizure, while Iranian authorities said their actions were in response to what they described as unlawful interference, according to state media. Details of the incidents remain unclear.
The renewed tensions disrupted optimism that had supported equities late last week, when investors had responded positively to reports of potential negotiations. Futures had previously risen after indications of a temporary easing of hostilities, but sentiment shifted as developments over the weekend suggested a setback in diplomatic efforts, market participants said.
In Europe and Asia, equity markets also moved lower, while energy stocks gained as higher crude prices lifted shares of major oil producers, according to trading data. Airline stocks and other sectors sensitive to fuel costs declined, reflecting concerns about rising input prices.
Investors were also monitoring upcoming corporate earnings releases for indications of how companies are managing heightened geopolitical risks and energy costs. Volatility indicators rose to their highest levels in about a week, signaling increased caution among traders.
As of Monday, stock futures had pared some losses ahead of the U.S. market open, though uncertainty remained elevated as officials continued to assess developments in the region.
