New York City — Stock futures showed modest gains on Monday as tensions escalated between Israel and Iran, triggering a spike in oil prices and raising concerns about the global economic outlook.

Futures for the Dow Jones Industrial Average climbed by 9 points, roughly 0.02%, while S&P 500 futures increased by 0.14%. The Nasdaq 100 futures added 0.19% as traders prepared for the market open amid renewed anxiety about geopolitical instability.

The price of West Texas Intermediate (WTI) crude oil surged more than 3% over the weekend, reaching above $75 a barrel, fueled by fears stemming from Israel’s military actions in Iran. The conflict intensified after Israel launched airstrikes that prompted Iran to retaliate with missile strikes, heightening tensions in a region critical to global oil supply.

Investors reacted nervously last Friday, leading to significant stock market declines. The Dow fell over 700 points, with all three major U.S. indexes experiencing drops of more than 1%. For the week, the Dow finished down 1.3%, while the S&P 500 and Nasdaq Composite posted declines of 0.4% and 0.6%, respectively.

The rise in oil prices coincided with a notable increase in gold prices as well. Gold is often seen as a safe haven during periods of market volatility, attracting investors who seek stability. The ongoing military exchanges continued through the weekend, with both nations targeting key energy facilities, an escalation that poses a threat to the already fragile global economy.

Iran has indicated it may contemplate closing the Strait of Hormuz, a vital shipping route for global oil transport, which could further disrupt markets and economic stability. Experts have expressed concern about the potential for the conflict to escalate into broader regional violence.

“The strikes mark the most significant assault on Iranian territory since the 1980s, raising the stakes significantly,” noted Ed Mills, a policy analyst at Raymond James. He pointed out that the future of hostilities could depend heavily on the involvement of major powers like the U.S. and Russia in the coming days.

As traders brace for market developments, they will also be keeping an eye on upcoming manufacturing survey data scheduled for release Monday. This data is critical ahead of a pivotal Federal Reserve meeting on Wednesday to discuss interest rates. Currently, futures trading suggests that there is a 97% likelihood the Fed will maintain the existing interest rate, despite pressure from political leaders advocating for cuts.

Increasing oil prices may complicate the Fed’s decision. The central bank may be less inclined to loosen monetary policy, amid fears that inflation could rise as a consequence of heightened geopolitical tensions. This combination of factors suggests that investors face a challenging environment in the days ahead.