US stock futures were mixed on Monday as a fresh US-Iran escalation hit semiconductor stocks and pushed investors towards a more defensive start to the week.
Nasdaq 100 futures led the decline, dragged lower by memory-chip names, while Dow futures held slightly higher.
The move came after Iran said it had closed the Strait of Hormuz, sending crude prices higher and reviving inflation concerns.
Wall Street now faces a crowded test: chip volatility, bank earnings, inflation data and Fed Chair Kevin Warsh’s first congressional testimony could all shape whether the equity rally holds.
5 things to know before Wall Street opens
1. Nasdaq futures lead the decline
S&P 500 futures fell 0.3%, while Nasdaq-100 futures dropped 0.9%. Dow Jones Industrial Average futures were little changed.
The split showed investors were not selling the entire market equally.
The pressure was concentrated in technology and semiconductor shares, where the recent momentum trade is most exposed to profit-taking and geopolitical shocks.
2. Chip stocks take the biggest hit
Memory-chip stocks were among the sharpest premarket losers.
Micron Technology fell 5.2%, Western Digital lost 6%, Seagate dropped 4.8% and SanDisk slid 6.6%. The iShares Semiconductor ETF fell 2.7%.
US-listed shares of SK Hynix dropped 9.3% after a blockbuster Nasdaq debut on Friday.
The move suggested investors were reassessing AI-chip exposure after a sharp rally, even though long-term demand for memory and data-centre hardware remains strong.
3. Oil spike revives inflation risk
Crude futures rose more than 2% as traders priced renewed risk around the Strait of Hormuz, a key route for global energy flows.
Iran and the US exchanged attacks in the Gulf, while Tehran’s claim that it had closed the strait raised doubts about last month’s interim agreement.
Analysts see the spike in oil and geopolitical stress as a direct threat to the momentum trade, especially for tech and chip stocks.
Higher energy prices can also complicate the Fed’s inflation fight.
4. Earnings season becomes the next test
The S&P 500 is still up more than 10% this year and less than 1% below its early-June record close. That resilience now faces an earnings test.
JPMorgan Chase, Goldman Sachs and Morgan Stanley report this week, followed by closely watched names including Netflix, GE and UnitedHealth.
LSEG IBES expects S&P 500 earnings to rise 23.7% from a year earlier, with technology still doing much of the heavy lifting.
5. CPI and Warsh testimony loom
Tuesday’s US consumer price index could reset rate expectations if energy pressures are beginning to feed into inflation. Producer prices and retail sales follow later in the week.
Warsh is also due to deliver his first monetary policy testimony before Congress.
Markets are pricing at least one 25-basis-point rate increase by year-end, keeping rate-sensitive growth stocks vulnerable.
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