Dow Jones futures decline as renewed Middle East tensions weigh on market mood

Dow Jones futures decline 0.33% to near 50,750 during the European hours on Monday, ahead of the US regular opening. However, S&P 500 futures gain 0.10% to near 7,410 and Nasdaq 100 futures rise 0.35%, trading near 29,130 at the time of writing.

US index futures face challenges amid geopolitical risks after the Israeli military stated a missile had been launched from Yemen towards Israeli territory, which has been intercepted by its aerial defense systems. Iran-backed Houthis confirm that they have launched attacks on Israel as a group and 'ban' Israeli shipping in the Red Sea.

US stock futures showed mixed performance following a sharp Wall Street selloff, which was primarily driven by heavy losses in semiconductor and technology shares. The market downturn was further fueled by stronger-than-expected US employment data for May. Nonfarm Payrolls rose by 172,000 jobs, while the previous month's reading was significantly revised upward to 179,000. With the Unemployment Rate holding steady at 4.3%, the robust labor market reinforced investor expectations that the Federal Reserve could raise interest rates later this year.

US Fed is widely expected to hold interest rates steady at the June 16-17 meeting, the first under new Chairman Kevin Warsh. However, expectations for future monetary tightening have gained traction. Escalating Middle East tensions have driven oil prices higher, sparking fresh concerns about a resurgence of inflationary pressures.

The regular Friday session saw aggressive selling across all major indexes, with technology stocks bearing the brunt of the damage. The Dow Jones fell 1.35%, and the S&P 500 plunged 2.64%. Led by a steep rout in chipmakers, the tech-heavy Nasdaq Composite shed 4.18%, marking its worst single-day performance since April 2025.