Market Turmoil Amid Growing Middle East Conflict

U.S. stock markets were rattled on Monday, with futures dropping over 1%, as increasing tensions in the Middle East pushed investors toward safer investments. The unrest propelled oil prices upward and boosted the appeal of traditional safe havens, with gold prices climbing by about 2% and bond prices rising sharply, briefly driving the U.S. 10-year Treasury yield to an 11-month low.

The situation escalated following new military actions by the U.S. and Israel, targeting Iran after recent attacks resulted in the death of Ayatollah Ali Khamenei. Iran's missile responses heightened fears of broader regional conflict. U.S. President Donald Trump indicated that the conflict might extend for four more weeks as the U.S. continues its operations.

This turmoil arrives amid a packed schedule of key U.S. economic data releases. Investors are bracing for manufacturing PMI results, retail sales numbers, ADP employment figures, and the non-farm payrolls report. The spike in oil prices intensifies concerns of reigniting inflationary pressures, complicating the Federal Reserve's policy stance. Market volatility has been exacerbated by uncertainties surrounding AI-related expenses, trade tariffs, and geopolitical tensions.