Stock futures edged higher and benchmark oil prices were on course to fall Monday, with investors seemingly unfazed by the U.S. bombing of nuclear sites in Iran.
Futures tracking the Dow Jones Industrial Average were up 45 points, or 0.1%. S&P 500 futures climbed 0.2%, and contracts tied to the tech-heavy Nasdaq 100 rose 0.3%.
Oil prices were down in early trading. The Brent international benchmark fell 0.5% to $76.62 a barrel, and West Texas Intermediate U.S. prices dropped 0.6% to $73.41 a barrel..
That felt like a muted response considering President Donald Trump took the U.S. into another war in the Middle East over the weekend, with Washington striking three key nuclear sites in Iran. But markets appear to still be following the “Nothing Ever Happens” mantra, which says investors would be better off just ignoring the news.
Wall Street will also be weighing up how likely it is that Iran retaliates to the strikes by closing the Strait of Hormuz. About 20% of the world’s oil passes through the corridor each day, so a blockage could drive up crude prices, which would have a knock-on effect on inflation. Iran’s parliament has approved a measure to close the strait, according to Iranian state media, although any decision would require sign-off from the country’s top leaders.
“It’s really all about whether the Iranian regime weaponizes oil, and in particular whether they seek to close the Strait of Hormuz,” Deutsche Bank macro strategist Jim Reid said in a morning research note. “Perhaps financial markets are pricing in a lower probability of a closure. All very back of the envelope of course.”
The market’s go-to safe-haven assets also weren’t moving much on Monday, suggesting investors were feeling relatively calm about the conflict in the Middle East.
The yield on the benchmark 10-year Treasury bond climbed 2 basis points to 4.40%. Gold prices fell 0.3% to $3,377 an ounce, and the U.S. Dollar Index, a gauge tracking the greenback’s strength against a weighted basket of other currencies, climbed 0.4%.