Traders engaged on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., on March 2, 2026.
Photo credit: Brendan McDermid | Reuters
U.S. stock futures experienced a sharp decline on Tuesday, erasing gains from Monday’s equity recovery, as oil prices surged once more and investors grew concerned about the potential for a prolonged U.S.-Iran conflict.
Futures linked to the Dow Jones Industrial Average shed 832 points, equating to a 1.7% loss. S&P 500 futures also declined by 1.7%, with Nasdaq 100 futures experiencing a 2.2% drop.
These dips in the market occurred following a drone strike on the U.S. embassy in Riyadh, Saudi Arabia, earlier today. Furthermore, President Donald Trump issued a warning that the conflict might persist for over four weeks. The preceding weekend also saw joint U.S.-Israeli military actions that led to the death of Supreme Leader Ayatollah Ali Khamenei.
Global crude oil prices continued their upward trend on Tuesday, driven by concerns that the escalating tensions could destabilize oil infrastructure and inflate fuel costs, thereby heightening inflationary risks. Reuters, citing Iranian media, reported that an Iranian Revolutionary Guard commander announced the closure of the Strait of Hormuz—the world’s most critical transit route for crude oil—and warned that Iran would incinerate ships attempting passage.
Brent crude experienced a 9% jump, while West Texas Intermediate futures rose by over 8%.
On Monday, stocks executed a remarkable recovery, with the S&P 500 and Nasdaq overcoming considerable early declines to finish marginally positive. The Dow also concluded the day significantly above its lowest trading points.
“Historically, what in the near term seems like a geopolitical crisis tends to be largely resolved from a market perspective over the ensuing six months, and where it’s not, it’s often because of an economic downturn that the geopolitical crisis didn’t cause,” noted Ryan Detrick, chief market strategist at Carson Group. “We believe the market has already been pricing in the possibility of a conflict for a month, which may limit the size of a further move and may cause a quicker rebound when the market sees a likely path to resolution.”
As Tuesday unfolds, investors are also keenly awaiting significant earnings announcements from cybersecurity firm CrowdStrike. Later in the week, quarterly results are also expected from chipmaker Broadcom and the large membership warehouse retailer Costco.