US stock futures tumbled Monday morning as oil prices soared past $100 a barrel for the first time since 2022 – fueling fears that a prolonged conflict in Iran could hammer prices at home.
Futures tied to the Dow Jones Industrial Average sank 528 points, or 1.1%, Monday morning, while S&P 500 and Nasdaq futures fell 1% and 1.1%, respectively.
Brent crude oil prices jumped to nearly $97 a barrel, while West Texas Intermediate crude rose to $102 after briefly topping $120 earlier in the day – the highest levels since Russia launched its invasion of Ukraine four years ago.
National average gasoline prices hit $3.48, according to AAA, as a major bottleneck in the Strait of Hormuz threatened global oil supplies and the shipment of goods like apparel, food, fertilizer and aluminum.
Wall Street’s volatility index – also known as the fear gauge – surged above 30 for the first time since last April, when President Trump unveiled a sweeping range of tariffs that panicked investors and economists.
In a Truth Social post Sunday, Trump signaled that rising oil prices were not top of mind amid the joint US and Israeli attacks on Iran, and Tehran’s broadening retaliation across neighboring regions including the United Arab Emirates, Bahrain, Kuwait and Saudi Arabia.
“Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for USA, and World, Safety and Peace,” Trump wrote on his social media platform. “ONLY FOOLS WOULD THINK DIFFERENTLY!”
But rising gasoline prices could coincide with the GOP’s attempts to address affordability ahead of the 2026 midterms, as Americans are already frustrated with stubborn inflation and sky-high housing costs.
Economists have also warned that energy shocks tend to ripple across consumer prices, potentially heating up inflation – and complicating the Federal Reserve’s path to further interest-rate cuts, especially after a dismal jobs report last week.
“The key here is the duration of the elevation in prices and the conflict itself. The shorter the duration, the more likely the impact would be temporary and the economy resilient,” Carol Schleif, chief market strategist at BMO Private Wealth, said in a note Monday.
“The Fed has historically looked through temporary oil-induced inflation shocks but is also dealing with conflicting employment and growth data,” Schleif wrote.
“We expect much debate over which side of the dual mandate – employment versus inflation – is in need of greater attention.”
As the conflict entered its tenth day, it showed no signs of slowing – after Iranian state media on Sunday announced Mojtaba Khamenei, the son of slain ruler Ayatollah Ali Khamenei, has been tapped as the regime’s next supreme leader.
War Secretary Pete Hegseth, meanwhile, said during a “60 Minutes” interview Sunday that he will do whatever it takes to topple the Iranian regime – and didn’t rule out sending US ground troops into Tehran.
