Global markets lurched lower on Monday after Iran claimed to have shut the Strait of Hormuz and targeted US military bases across the Middle East, shattering last month’s interim peace deal and sending oil prices sharply higher.
Nasdaq 100 futures tumbled 0.9% in premarket trading as the technology and semiconductor sectors bore the brunt of the sell-off. The iShares Semiconductor ETF fell 2.7%, with memory-chip makers hit worst: Micron Technology shed 5.2%, Western Digital lost 6%, Seagate dropped 4.8%, and SanDisk slid 6.6%. US-listed shares of SK Hynix, fresh from a blockbuster Nasdaq debut on Friday, cratered 9.3%.
The equity split underscored a flight to safety. While Dow Jones Industrial Average futures were barely changed, S&P 500 futures fell 0.3%, highlighting intense pressure on the momentum trade that has driven much of this year’s gains. Crude markets reacted violently — Brent futures surged as much as 4.5% to $79.43 a barrel and WTI climbed over 2.4% to $73.14 — reviving the specter of supply-driven inflation that could complicate the Federal Reserve’s policy path.
Treasury yields offered a more measured response. The benchmark 10-year yield edged up to 4.577%, while the policy-sensitive 2-year yield hit 4.239%, its highest since February 2025, as traders priced in at least one more quarter-point rate hike by year-end. The 30-year bond yield was flat around 5.08%.
The fresh hostilities erupted over the weekend when Iran struck a commercial vessel in the Strait of Hormuz, prompting multiple waves of US strikes on Iranian military targets. Iran retaliated by attacking US bases in Kuwait, Bahrain, Jordan, Oman and Qatar, with state media framing the assaults as payback for renewed American bombings. Tehran’s claim that it now controls the strait — the world’s most critical oil transit chokepoint — has placed enormous uncertainty over global energy flows.
With the interim agreement unravelling, investors now face a crowded week that could amplify the volatility. Tuesday’s US consumer price index will reveal whether energy costs are already feeding into broader inflation, while new Fed Chair Kevin Warsh’s first congressional testimony will be scrutinized for any hint of a rate response. Earnings from JPMorgan Chase, Goldman Sachs, Morgan Stanley, Netflix, GE and UnitedHealth will further test an S&P 500 still up more than 10% this year and less than 1% below its record high.
Market participants fear that sustained oil price pressures could force the Fed into a more hawkish stance, squeezing the rate-sensitive growth stocks that have led the rally — a scenario that would likely spill into risk assets including cryptocurrencies.
