US stock futures dropped sharply on Monday as oil surged past $100 a barrel amid the escalating Middle East conflict, raising concerns that higher energy costs could slow growth and reignite inflation. Dow and S&P 500 futures fell 1.3% and 1.6%, respectively, while Nasdaq 100 futures dropped 2%. With the Iran war entering its second week and oil shipments effectively blocked through the Strait of Hormuz, several Middle Eastern producers, including Kuwait, Iran, and the UAE, have cut crude output as available storage nears capacity. Wall Street was already pressured last week after weaker-than-expected payrolls data stoked inflation concerns linked to the conflict. The Dow finished last week 3% lower, the S&P 500 fell 2%, and the Nasdaq dropped 1.2%. Investors now turn to this week’s CPI and PCE inflation readings for directional cues, along with earnings from Oracle, Adobe, and Hewlett Packard Enterprise, among others.
