Wall Street opened Monday on shaky ground as oil prices surged past $110 a barrel and investors scrambled to assess the damage from a widening Middle East war. Futures across all three major indexes fell sharply, with markets still recovering from one of the roughest weeks in months.
Dow futures dropped 1.7% after plunging the equivalent of 1,000 points overnight. Contracts tied to the S&P 500 fell roughly 1.6% while Nasdaq 100 futures sank about 1.7%. All three had briefly fallen more than 2% in the early hours before clawing back some ground. The moves underscored just how quickly investor sentiment had shifted as the geopolitical situation in the Middle East continued to escalate.
Oil drives the Dow selloff
Energy markets were at the heart of Monday’s turbulence. West Texas Intermediate crude, the American benchmark, surged more than 25% to briefly top $116 a barrel before pulling back to around $103, still up roughly 14% on the session. The global benchmark Brent crude climbed 16% to trade above $107 after earlier touching $117.
The spike came as supply fears deepened over the weekend. Kuwait confirmed it had begun cutting oil production, though the full scale of those reductions remained unclear. Output in Iraq was reported to have dropped by roughly 70%. The Strait of Hormuz, through which about a fifth of the world’s daily seaborne oil supply passes, remained effectively closed, keeping millions of barrels stranded and out of reach of global buyers.
A market already under pressure
Monday’s losses followed a bruising stretch the prior week. The Dow shed roughly 3%, its steepest weekly drop since concerns over tariff policy rattled markets in the spring of 2025. The S&P 500 fell about 2% over the same period while the Nasdaq Composite finished the week down more than 1%.
The selloff has reignited fears about inflation and slower growth at a moment when investors were already watching economic data closely. Two key inflation readings are on the calendar this week, with the Consumer Price Index due Wednesday and the Personal Consumption Expenditures index on Friday. Neither report is expected to fully capture the economic impact of oil’s dramatic run higher, given the timing, but both will offer important context for where price pressures stood before the latest surge.
What Wall Street is watching
Beyond the macro picture, earnings season rolls on. Hewlett Packard Enterprise is set to report results after the closing bell on Monday. Oracle, Adobe and Dick’s Sporting Goods are all scheduled to post quarterly results later in the week, giving investors a few corporate data points to weigh against the broader market anxiety.
For now, though, the mood on Wall Street is being set almost entirely by what happens in the Persian Gulf. Every barrel of oil that fails to make it through the Strait of Hormuz represents not just a supply gap but a psychological pressure point for markets already stretched thin. Until there is a clearer path toward de-escalation, investors are likely to remain on edge, watching oil charts as closely as they watch earnings calls.
The question hanging over everything is whether this is the beginning of a prolonged disruption or a short, sharp shock the market can absorb. Right now, very few people on Wall Street seem confident they know the answer.
