Stock futures dip as U.S. strikes raise Middle East tensions

June 23, 2025 (MLN): Stock futures fell ahead of Monday’s session after the United States entered Israel’s war against Iran over the weekend by striking three nuclear sites, a move by President Donald Trump that raised oil prices and heightened fears of a wider Middle East conflict.

Futures tied to the Dow Jones Industrial Average fell by 126 points, or 0.3%. S&P 500 futures shed 0.26% and Nasdaq 100 futures lost 0.35%.

The U.S. launched attacks Saturday at Iranian nuclear facilities in Fordo, Isfahan, and Natanz, surprising investors who had expected more diplomacy after Trump stated on Friday he would decide on Iran “within the next two weeks,” according to the White House.

Oil prices, already on the rise amid recent regional tensions, spiked again. On Sunday night, U.S. crude oil futures rose 3.8% to nearly $77 a barrel.

“When you have conflict, you have an overreaction a knee jerk reaction which tends to be an exaggeration, that can last up to two to three weeks,” said Jay Woods, chief global strategist at Freedom Capital Markets.

“With Ukraine, the S&P 500 sold off 6% and oil spiked dramatically.”

In a Saturday night speech from the White House, Trump warned, “there will be either peace, or there will be tragedy for Iran far greater than we have witnessed over the last eight days.”

Traders are now bracing for Iran’s retaliation, which could include targeting U.S. personnel in nearby bases or closing the Strait of Hormuz a crucial artery for global oil flows.

A prolonged blockade could push oil prices above $100 per barrel, as CNBC reported.

In a Sunday interview with Fox News, U.S. Secretary of State Marco Rubio urged China Iran’s key oil customer to intervene and prevent any disruption to the strait.

“Now with the U.S. fully engaged in the conflict, the baseline for oil prices has shifted to the mid $80s range per barrel entering stage two from one-side regional conflict to U.S. managed conflict,” said Ahmad Assiri of Pepperstone.

“Even if Iran doesn’t physically close the strait or attack oil tanks, the mere increase in probability from about 5% to around 15% will itself create a premium in crude prices.”

Last week, the S&P 500 lost 0.15%, marking its second straight weekly decline.

Despite the recent weakness, the index closed Friday about 3% off its record high.

Rising oil prices and the risk of broader war in the Middle East have added new threats to a market already navigating a rapid transformation in global trade under Trump’s leadership.

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