U.S. Futures Edge Up Amid Mideast Tensions and Fed Rate Speculation
U.S. stock futures showed modest gains on Monday, rebounding slightly after last week’s sharp losses driven by escalating conflict between Iran and Israel. Dow, S&P 500, and Nasdaq futures each rose between 0.3% and 0.5% as investors found temporary relief in a retreat in crude oil prices. The previous week’s market decline had been fueled by a 7% surge in oil, triggered by military strikes exchanged between the two countries, stoking fears of broader regional instability and supply disruptions.
Tensions in the Middle East remain high as the conflict entered its fourth day, with global leaders at the G7 summit in Canada expressing concern. While U.S. President Donald Trump held out hope for a possible resolution, no concrete progress was visible. Despite the geopolitical uncertainty, the dip in oil prices from January highs helped ease investor concerns about inflationary pressures that could impact the U.S. economy.
Markets are now shifting focus to the U.S. Federal Reserve’s upcoming policy decision, expected Wednesday. While rates are likely to remain unchanged, investors are closely watching for Fed Chair Jerome Powell’s guidance and revised economic forecasts, which could offer clues about the timing and scale of future rate cuts. Current market expectations suggest around 48 basis points in cuts by the end of 2025, with September eyed for a possible first move.
Barclays analysts believe the Fed’s updated “dot plot” may reflect a more cautious stance, projecting just one rate cut this year and potentially three in 2026. This outlook stems from ongoing concerns over inflation, especially in light of recent tariff changes and slower expected GDP growth. Traders and analysts alike are bracing for more signals about how the central bank plans to balance inflation risks with economic momentum.
In corporate news, Sarepta Therapeutics shares tumbled 30% in premarket trading following the disclosure of a second death linked to its gene therapy treatment for a rare muscular disorder. The announcement added pressure to an otherwise jittery market, showing how sector-specific developments continue to impact broader investor sentiment.
Source: Reuters