Wall Street index futures are trading lower ahead of the open, reflecting growing caution among investors.
The pullback is driven by a sharp rise in crude oil prices following an escalation of geopolitical tensions in the Middle East, which has reignited concerns about supply disruptions and inflationary pressure.
Crude oil prices extended their recent gains, reinforcing a market regime where energy assets are outperforming broader equities.
The rally in oil comes as investors remain cautious about escalating tensions, with Brent crude climbing sharply on the back of shipping risk and potential supply constraints.
This divergence highlights the ongoing rotation into defensive and energy-related assets amid broader equity weakness.
The market's focus is now squarely on the Federal Reserve's upcoming interest rate decision and the subsequent press conference by Chair Jerome Powell.