Stocks mixed as investors weigh Middle East risks and unclear US rescue strategy
US stock futures were mixed early Monday as investors monitored escalating tensions in the Middle East alongside a new effort to reopen the Strait of Hormuz.
Futures tied to the S&P 500 rose 0.1%, while Nasdaq 100 futures gained 0.21%. Dow Jones Industrial Average futures slipped 98 points, or 0.2%. The cautious tone comes as President Donald Trump rolled out “Project Freedom,” a plan to help vessels stranded by the closure of the vital shipping lane.
“I have told my Representatives to inform them that we will use best efforts to get their Ships and Crews safely out of the Strait,” Trump said in a post. “In all cases, they said they will not be returning until the area becomes safe for navigation, and everything else.”
The initiative is expected to begin Monday, though details on how it will operate remain unclear, according to The Wall Street Journal. The effort is aimed at easing a growing backlog of vessels unable to transit the strait after months of disruption tied to the Iran conflict. Trump said the US would guide ships through the Strait of Hormuz, targeting cargo from countries not directly involved in the conflict.
Even so, shipowners and insurers are still grappling with how the plan would work in practice. Ongoing attacks and the absence of a clearly defined security structure have left industry participants uncertain about whether conditions are safe enough to resume voyages, according to Bloomberg.
Iran has warned that outside involvement in the strait could escalate tensions, even as diplomatic signals remain mixed. Tehran said Sunday it had received a US response to its latest peace proposal following earlier optimism that negotiations could advance. Trump, however, pushed back on those expectations, saying Iran was only negotiating “because they have no military left.”
Markets have so far shown resilience. On Friday, the S&P 500 and Nasdaq Composite both reached new intraday and closing highs, rising 0.29% and 0.89%, respectively, while the Dow fell 152.87 points, or 0.31%.
Strategists say strong earnings continue to support equities despite geopolitical risks.
Bank of America’s Nigel Tupper said, “The strong global earnings cycle and a few persistent investment themes remain supportive of global equity market returns,” according to CNBC, while Wolfe Research’s Chris Senyek added that “With mega cap tech earnings coming in solid, adding more fuel to the AI theme, we believe that investors are likely to continue to chase the perceived tech winners in semis and memory, among others.”
