The major U.S. index futures are currently pointing to a slightly lower open on Monday, with stocks likely to see further downside following the sharp pullback seen during last Friday's session.
Lingering concerns about the conflict in the Middle East may weigh on Wall Street, as President Donald Trump warned Iran the "clock is ticking."
Trump said in a post on Truth Social that Iran "better get moving, FAST, or there won't be anything left of them," leading to worries about the U.S. renewing military action.
A report from Axios citing two U.S. officials said Trump is expected to convene his top national security team in the Situation Room on Tuesday to discuss military options.
The U.S.-Iran war has effectively closed the vital Strait of Hormuz, leading to a spike in crude oil prices and subsequent concerns about inflation and the outlook for interest rates.
Treasury yields spiked last Friday amid speculation the Federal Reserve's next interest rate move could be an increase rather than a cut.
However, yields are giving back ground this morning amid a slump by crude oil futures, potentially limiting the downside on Wall Street.
Following the strength seen during Thursday's session, stocks pulled back sharply over the course of the trading day on Friday. The major averages all showed significant moves to the downside on the day.
The major averages finished the day off their lows of the session but still firmly negative. The Dow slumped 537.29 points or 1.1 percent to 49,526.17, the Nasdaq plunged 410.08 points or 1.5 percent to 26,225.14 and the S&P 500 tumbled 92.74 points or 1.2 percent to 7,408.50.
With the pullback on the day, the major averages were little changed for the week. The S&P 500 crept up by 0.1 percent, while the Nasdaq edged down by 0.1 percent and the Dow dipped by 0.2 percent.
The sell-off on Wall Street may partly have reflected profit taking following recent strength in the markets, which lifted the Nasdaq and S&P 500 to record highs.
Technology stocks helped lead the pullback, with Intel (INTC) and Micron Technology (MU) plunging by 6.6 percent and 6.2 percent, respectively. Shares of Nvidia (NVDA) also tumbled by 4.4 percent.
A sharp increase in treasury yields also weighed on the markets, with the yield on the benchmark ten-year note surging to its highest levels in almost a year.
The spike in treasury yields came as recent data showing significant accelerations in the pace of consumer and producer price inflation has led to concerns about the outlook for interest rates.
CME Group's FedWatch Tool is currently indicating a 38.9 percent chance rates will be a quarter point higher following the Federal Reserve's last meeting of the year, up from just 13.7 percent a week ago.
The weakness on Wall Street also came amid a sharp increase by the price of crude oil, as U.S. crude oil futures have surged by more than 4 percent.
The jump in oil prices came as the summit between President Donald Trump and his Chinese counterpart Xi Jinping produced warm words but yielded little progress on the U.S. war with Iran.
Gold stocks moved sharply lower along with the price of the precious metal, resulting in a 7.1 percent nosedive by the NYSE Arca Gold Bugs Index.
Substantial weakness was also visible among airline stocks, as reflected by the 4.4 percent plunge by the NYSE Arca Airline Index.
Semiconductor stocks also showed a significant move to the downside, dragging the Philadelphia Semiconductor Index down by 4 percent.
Steel, housing and computer hardware stocks also saw considerable weakness, while oil producer and software stocks bucked the downtrend.
Commodity, Currency Markets
Crude oil futures are falling $0.36 to $105.06 a barrel after soaring $4.25 to $105.42 a barrel last Friday. Meanwhile, after plunging $123.40 to $4,561.90 an ounce in the previous session, gold futures are edging down $3.70 to $4,558.20 an ounce.
On the currency front, the U.S. dollar is trading at 158.77 yen versus the 158.76 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1650 compared to last Friday's $1.1625.
Asia
Asian shares ended broadly lower on Monday as oil and global bond yields spiked amid rising U.S.-Iran tensions. A raft of Chinese data signaling slowing economic momentum in April also kept investors on edge.
Amid stalled peace talks, U.S. President Donald Trump has warned Iran the "clock is ticking" and there won't be anything left of Iran unless it agrees to a deal.
Iran issued a stark warning to Washington, with senior figure Mohsen Rezaei cautioning that escalating military pressure could turn the Sea of Oman into a "graveyard" for U.S. vessels.
"Our understanding is that a naval blockade is an act of war, and responding to it is our natural right," Rezaei said.
A drone strike caused a fire at a nuclear power plant in the United Arab Emirates and Saudi Arabia reported intercepting three drones, escalating regional tensions.
The U.S. dollar held its ground against major currencies on Fed rate hike expectations, while gold edged up slightly to hold above $4,550 an ounce.
Brent crude futures held above $110 a barrel as the continued near-shutdown of the Strait of Hormuz kept supply concerns elevated.
China's Shanghai Composite Index finished marginally lower at 4,131.53 as disappointing retail sales and industrial output data for April signaled deeper economic trouble.
Hong Kong's Hang Seng Index slumped 1.1 percent to 25,675.18, with technology stocks and financials pacing the declines.
Japanese markets ended sharply lower as technology-related stocks succumbed to profit taking after recent strong gains.
The Nikkei 225 Index fell 1 percent to 60,815.95 as the 10-year Japanese government bond yield climbed to 2.80 percent at one stake, the highest level since May 1997 on inflation concerns and BoJ rate hike expectations. The broader Topix Index settled 1 percent lower at 3,826.51.
Seoul stocks recovered from an early slide, with the Kospi Index closing up 0.3 percent at 7,516.04. Shares of Samsung Electronics jumped 3.9 percent after the government stepped in to help avert a looming labor union strike.
Australian markets hit a seven-week low, with materials, industrial stocks and real estate trusts leading losses on concerns about the global economic outlook.
The benchmark S&P/ASX 200 Index tumbled 1.5 percent to 8,505.30 while the broader All Ordinaries Index ended down 1.5 percent at 8,735.40.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index plunged 1.6 percent to 12,762.92, ending at a seven-week low after a survey showed New Zealand's services sector remained in contraction in April.
Europe
European stocks are turning in a mixed performance in cautious trading on Monday as investors remained focused on escalating tensions in the Middle East.
G7 finance ministers are gathering in Paris today and tomorrow to discuss global economic imbalances as geopolitical differences threaten to test the group's cohesion.
Eurozone government bond yields climbed, with the yield on the Germany 10-year bond rising to its highest level in 15 years, as investors fret over the impact of surging crude oil prices on inflation and interest rates.
Brent crude futures rose above $110 a barrel after U.S. President Donald Trump warned Iran the "clock is ticking" on peace talks.
While the French CAC 40 Index is down by 0.4 percent, the U.K.'s FTSE 100 Index is up by 0.4 percent and the German DAX Index is up by 0.8 percent.
Irish low-cost airline Ryanair Holdings has moved sharply lower after it warned of rising costs this year.
British insurer Prudential has also fallen after announcing the acquisition of a 75 percent stake in Bharti Life Insurance.
Anglo American has also dropped. The mining giant has agreed to sell its coal mining operation in Australia to privately-owned Dhilmar for $3.88 billion.
Meanwhile, Danish engineering and industrial technology company Hove has rallied after delivering record first quarter revenue and profit growth.
U.S. Economic News
The National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of May at 10 am ET. The housing market Index is expected to come in unchanged at 34.
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May 15, 2026 15:25 ET Apart from the confirmation of Kevin Warsh as the next Fed chair, the main news on the economics front this week included key price data from the U.S. and the first quarter economic growth figures from major economies. Both consumer prices and producer costs have started to reflect the effect of supply shocks due to the Middle East conflict. In Europe, GDP data was in focus, while inflation data from China dominated the news flow in Asia.