Markets Edge Higher as U.S.-Iran Tensions Simmer; Oil Volatile, Senate Eyes Fiscal Bill

U.S. stock futures were choppy on Monday morning, holding near flatline levels as investors processed the potential geopolitical and economic fallout from Washington's strikes on Iranian nuclear facilities. The broader market also remained cautious ahead of business activity data and fresh fiscal developments from the U.S. Senate.

1. Futures Trade Sideways Amid Geopolitical Uncertainty

At 05:20 ET (09:20 GMT):

• Dow Futures: Flat

• S&P 500 Futures: +10 points (+0.2%)

• Nasdaq 100 Futures: +46 points (+0.2%)

Last week, all three major indexes closed lower, rattled by escalating conflict between Israel and Iran. Markets had awaited President Trump's response, which came this weekend with U.S. airstrikes on three Iranian nuclear sites. The strikes, though escalating tensions, also removed some uncertainty, giving markets a temporary sense of direction.

2. Oil Prices Rise But Pull Back from Highs

Crude oil saw modest gains Monday morning, following an initial spike:

• Brent Crude (August): +0.2% to $77.17/barrel

• WTI Crude (August): +0.2% to $72.15/barrel

Analysts remain concerned about supply disruptions, particularly if Iran retaliates by blocking the Strait of Hormuz, through which over 20% of global oil supply passes.

Quote:
"Since the U.S. targeted Iranian nuclear facilities... supply risks for energy markets have increased significantly,"
— Warren Patterson, ING

🔗 Track real-time energy prices using the Commodities API

3. Markets Await Tehran's Response

Iran has yet to officially disclose its retaliation plans, though threats have included:

• Closing the Strait of Hormuz

• Attacks on U.S. military bases

• Expanded targets across Israel and allies

President Trump has hinted at regime change, escalating the rhetoric. However, some analysts believe the removal of strategic ambiguity may help markets stabilize in the near term.

Quote:
"The overhang of uncertainty lifted somewhat... but long-term headwinds like tariffs and fiscal pressure remain."
— Vital Knowledge

4. Senate Prepares to Vote on Fiscal Bill

This week, attention also turns to Washington. The Senate aims to vote on a Trump-backed fiscal package, informally dubbed the "One Big Beautiful Bill Act." Key highlights:

• Extension of 2017 tax cuts

• Increased defense and border security spending

• Potential Medicaid spending cuts to offset costs

Lawmakers are racing to finalize and send the bill to Trump by July 4, with high stakes for markets and the 2025 budget.

5. Key Economic Data Ahead

Investors are also watching for:

• Purchasing Managers Index (PMI) data due Monday

• Fed Chair Jerome Powell's testimony to Congress starting Tuesday

These events will offer clues about the Fed's interest rate trajectory amid stubborn inflation and geopolitical volatility.

🔗 Use the Economics Calendar API to track upcoming macroeconomic releases and rate commentary.