US stock futures slipped on Monday (April 20), signalling a cautious start to the week as a sharp escalation in US-Iran tensions over the weekend rattled investor sentiment and clouded prospects for a near-term peace deal.
Dow Jones Industrial Average futures fell as much as 258 points, or about 0.5%, though they later pared losses to around 0.4%. Futures tied to the S&P 500 and Nasdaq 100 also declined roughly 0.4%–0.5%, indicating broad-based weakness across benchmarks.
The risk-off mood follows a chaotic geopolitical turn. US President Donald Trump said Washington had fired on and seized an Iranian-flagged cargo ship in the Gulf of Oman, adding that the vessel was under US Treasury sanctions and is now in “full custody.”
The move came after Iran declined to participate in another round of US-led peace talks in Pakistan.
Tensions escalated further after Iran reportedly fired at vessels and halted traffic through the Strait of Hormuz over the weekend, accusing the US of violating ceasefire terms.
Trump, in turn, warned of potential strikes on Iranian infrastructure if a deal is not reached, with the current ceasefire set to expire this week. The standoff has raised fresh concerns about supply disruptions in one of the world’s most critical oil transit routes, complicating already fragile negotiations.
Markets reacted swiftly to the renewed uncertainty. Oil prices surged, with US benchmark West Texas Intermediate crude jumping as much as 5.7%–6% to hover above $87–$88 per barrel, while global benchmark Brent crude advanced to near $95.
The spike in crude has revived fears of inflationary pressures at a time when equities are trading near record highs. Wall Street had just wrapped up a strong week, with the S&P 500 climbing 4.5% and the Nasdaq Composite surging 7.2%. Notably, the Nasdaq logged its 13th straight session of gains on Friday, a streak not seen since 1992, as optimism around a potential diplomatic breakthrough fuelled a risk-on rally.
Beyond geopolitics, investors are also bracing for a heavy earnings calendar this week. Key companies, including Tesla, Intel, and United Airlines, are set to report, offering the next set of cues for markets navigating a mix of record valuations and rising geopolitical risk.
(Edited by : Ajay Vaishnav)
First Published: Apr 20, 2026 6:23 PM IST
