Futures Rebound as Oil Falls

Stock futures rebounded early Monday as investors were optimistic that the conflict between Israel and Iran may remain contained. The spike in oil prices due to the escalating conflict also eased.

Futures for the Dow Jones Industrials popped 255 points, or 0.6%, to 42,778.

Futures for the S&P 500 index hiked 39.75 points, or 0.7%, to 6,071.25

Futures for the NASDAQ cruised 178.50 points, or 0.8%, to 22,039.25

Traders have been closely watching the Middle East after Israel’s strike on Iran Friday. Iran launched missiles in retaliation, increasing the severity of conflict in the region.

The attacks continued for a fourth day Monday, with the two countries targeting each others’ energy facilities, an escalation which could rattle the global economy and markets further in the new week. Iran said it is considering shutting down the Strait of Hormuz, a key route for the global oil market. Israel claimed on Monday to have achieved “aerial superiority” over Iran, according to a military spokesperson.

Investors will monitor manufacturing survey data due Monday morning, which comes ahead of the Federal Reserve’s interest rate decision on Wednesday.

Fed funds futures are pricing in a nearly 100% likelihood of the central bank keeping rates unchanged, even as President Donald Trump has been pressuring Fed Chief Jerome Powell for a rate cut.

In Japan, the Nikkei 225 index regained 1.3% Monday, while in Hong Kong, the Hang Seng added 0.7%

Oil prices dipped 87 cents to $72.11 U.S. a barrel.

Gold prices fell $17.20 to $3,435.60 U.S. an ounce.