Crude oil prices climbed to a one-month high on Tuesday, driven by escalating geopolitical risks in the Middle East following US military strikes on Iran.
The sharp rise in energy costs has reignited concerns that the Federal Reserve may need to maintain a hawkish stance or even consider rate hikes to combat inflationary pressure, complicating the outlook for US equities.
US stock index futures traded in mixed territory as investors digested the conflicting signals.
While the broader market showed resilience after sharp losses in the previous session, the surge in oil prices acted as a headwind, reinforcing expectations that the central bank will keep borrowing costs elevated for longer.
The repricing reflects a shift in sentiment as traders balance the immediate impact of higher energy costs against the broader economic data set.
The development marks a significant escalation from Monday’s trading, when crude oil prices had settled near pre-conflict levels, suggesting a temporary pause in volatility.