Despite escalating tensions between Israel and Iran over the weekend, US stock futures showed resilience on Sunday night. The Dow Jones Industrial Average futures, along with S&P 500 futures, both saw a modest increase, while Nasdaq 100 contracts gained slightly more. This cautious optimism followed a tumultuous Friday session where the Dow plummeted significantly. Meanwhile, oil prices surged, reaching their highest levels since January, driven by concerns about potential disruptions in global energy supply.

The recent geopolitical tension has added another layer of complexity to an already volatile market environment. Following retaliatory strikes that targeted energy infrastructure, fears have intensified regarding a possible broader regional crisis. These developments come at a critical time for markets already grappling with uncertainties related to tariffs. Last week's sell-off pushed major US indexes into negative territory, with the Dow, S&P 500, and Nasdaq Composite all posting weekly losses.

Amid this uncertainty, crude oil prices experienced significant fluctuations, initially spiking sharply before moderating slightly. West Texas Intermediate futures surged dramatically, though they later settled just under $74 a barrel. Similarly, Brent crude traded near its peak price briefly. The volatility reflects growing apprehension about the conflict's potential impact on global energy supplies, especially if Iran follows through on hints to close the Strait of Hormuz, a vital route for a substantial portion of the world’s oil.

As investors look ahead, attention will focus on upcoming economic data releases, including the New York Fed's Empire State Manufacturing Survey. These updates could provide insights into current economic conditions as the Federal Reserve prepares to make an interest rate decision. Although markets broadly anticipate the Fed to maintain steady rates, rising oil prices pose challenges for inflation management. President Trump continues to advocate for rate cuts, but evolving market dynamics may limit flexibility in monetary policy adjustments.

Investors remain vigilant as they assess the implications of these geopolitical events on global financial stability. With potential disruptions looming in key sectors, all eyes are on how central banks and policymakers respond to preserve economic balance amid heightened uncertainty.