U.S. stock futures fell Tuesday, the first trading day after Labor Day, as escalating conflict in the Middle East pushed oil prices to six-week highs and Canada’s retaliatory tariffs on American goods took effect. Dow Jones Industrial Average futures were down 491 points, or 0.9%, at 5 a.m. ET. S&P 500 futures were off 0.4% and Nasdaq-100 futures retreated 0.2%. Brent crude futures rose 2.3% to $99.22 per barrel after Iran-backed Houthi militants struck energy infrastructure in Saudi Arabia, according to The Wall Street Journal. West Texas Intermediate futures climbed 3.3% to $94.54. Oil has gained ground for a third consecutive session, with the ongoing U.S.-Iran war stoking concern among traders that sustained energy price increases will accelerate inflation. The 10-year U.S. Treasury yield moved back above 4.8% Tuesday as energy-price anxiety weighed on bonds. The 10-year yield last week notched its loftiest reading since November 2023, and the 2-year note also touched a multi-year peak last seen in January 2025. Dan Coatsworth, head of markets at AJ Bell, said in a note Tuesday that apparent moves toward a deal between Iran and Oman to manage shipping through the Strait of Hormuz were highlighting Tehran’s control of the waterway. He added that investors would be watching U.S. inflation data due later this week to gauge whether rising energy prices are feeding into broader price pressures. The Federal Reserve is scheduled to hold a monetary policy meeting next week. According to the CME Group’s FedWatch tool, traders see a 60% probability that the central bank will lift rates by a quarter-percentage point at the conclusion of next week’s meeting. Wholesale inflation data is due Thursday and consumer price index figures for August are expected Friday. Economists expect headline inflation to have held at an annual rate of 3.4%, according to The Wall Street Journal. Adding to the unsettled tone, Canada’s retaliatory levies of as much as 50% on select U.S. products kicked in Tuesday. Ahead of their arrival, President Donald Trump declared Monday that Bombardier, the Canadian aerospace company, would be barred from the American market unless Canada shifts production of its aircraft to the United States. “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!” Trump wrote on Truth Social. Markets in Asia and Europe also declined. Tokyo’s Nikkei 225 shed 1.7%, Seoul’s Kospi gave up 0.58%, Sydney’s S&P/ASX 200 declined 1%, and Hong Kong’s Hang Seng closed 0.38% lower. In Europe, the broad Stoxx 600 index slid 0.4% in the opening stretch of the regional session.
