US stock futures pointed to a cautious open on Monday, with Dow contracts sliding 50 points after President Donald Trump rejected Iran’s latest peace offer, souring risk sentiment and shifting investor focus back to geopolitical risks. The rejection was labeled “totally unacceptable,” dimming hopes of a near-term diplomatic breakthrough and raising concerns over potential disruption to critical oil shipping lanes in the Strait of Hormuz.
European markets mirrored that tentativeness, with the FTSE 100 edging 0.1% higher while the CAC 40 fell 0.5% and the DAX traded flat. The STOXX 600 was little changed, underlining a region acutely sensitive to energy costs caught between positive domestic economic signals and the threat of reinvigorated inflation from rising crude prices.
The geopolitical sting was compounded by a stronger-than-expected US payrolls report for April. Non-farm payrolls rose by 115,000—nearly double the 62,000 forecast—and the unemployment rate held at 4.3%, reinforcing the view that the Federal Reserve has little urgency to ease monetary policy soon. Oil prices have climbed sharply this month, and Tuesday’s inflation data is now a pivotal focus, with investors watching for signs that higher energy costs are feeding into headline price pressures.
With risks mounting, market participants remained selective, rewarding company-specific updates like Compass Group’s raised profit forecast while shying away from broader index exposure. The uneasy mix of rising oil, a patient central bank, and unresolved Middle East tensions kept a lid on conviction, leaving equities struggling for clear direction.
