Dow, S&P 500, Nasdaq Futures Dip as Hormuz Tensions Escalate: ANNA, MSFT, MLTX, ONDS, RDDT Under Scrutiny

Escalating Tensions in the Middle East

Middle East tensions have entered their fifth week, with new involvement from Houthi forces and additional U.S. troop deployments fueling concerns of broader escalation. Iran has warned that ships transiting the Strait of Hormuz could face a “harsh response,” while reports indicate some vessels were turned away and a cargo ship was struck in the waterway. The situation has raised fears about potential disruptions to global oil supply and increased volatility in financial markets.

Impact on U.S. Stock Futures

U.S. stock futures experienced a slight decline late Sunday as investors remained cautious due to escalating tensions in the Middle East and renewed threats to global oil supply. As of 9:15 p.m. ET, Dow and Nasdaq 100 futures were down 0.7%, while S&P 500 futures fell by 0.6%. Retail sentiment toward major ETFs like the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) was described as “extremely bearish” amid high message volume, while sentiment toward the SPDR Dow Jones Industrial Average ETF Trust (DIA) was “bearish.”

Market Drivers and Global Implications

The market reaction to intensifying Middle East tensions has been significant. The conflict has entered its fifth week, with Iran-backed Houthi militants joining the fight and 3,500 additional U.S. troops arriving in the region. Israel reportedly struck Tehran again over the weekend, while Saudi Arabia intercepted nearly a dozen drones.

Iran’s Revolutionary Guard has stated that movement through the Strait of Hormuz would face a “harsh response.” Chinese vessels were reportedly turned away, and a Thai-flagged cargo ship ran aground in the waterway. This chokepoint handles roughly one-fifth of the global oil supply, making it a critical point of concern.

Tehran has also decided to formalize control over traffic through the strait by restricting passage to most vessels while allowing only limited shipments from select countries. Brent crude previously settled at $112.57 per barrel, while West Texas Intermediate crude reached $99.64, their highest close since July 2022. Oil prices surged above $116 in early Monday trading after Houthi forces launched missiles at Israel and warned operations would continue until attacks on Iran cease.

Concerns Over Global Shipping Routes

The Houthis’ entry into the conflict has raised concerns that the Red Sea and Bab el-Mandeb corridor could become additional pressure points for global shipping routes, potentially tightening supply further. Macquarie analysts warned that oil could reach $200 per barrel if the conflict extends through June while the Strait of Hormuz remains shut.

Gary Black, managing partner at The Future Fund, noted that Saudi Arabia’s East-West Yanbu pipeline is currently operating at full capacity, partially offsetting the roughly 15 million barrels per day that typically transit Hormuz. He added that the Houthis’ involvement increases the risk that the Red Sea could become “a new front in the conflict.”

U.S. Equities and Investor Sentiment

U.S. equities extended their recent slide on Friday, with all three major indexes posting sharp losses. The Dow entered correction territory, and the S&P 500 marked a seven-month low, capping a fifth straight weekly decline for the benchmark. Despite this, investor sentiment remained cautious even after U.S. President Donald Trump extended a deadline for potential strikes on Iran’s energy infrastructure to April 6 while signaling negotiations were continuing.

John Spencer, executive director of the Urban Warfare Institute, emphasized that expectations of a full-scale ground invasion of Tehran reflect “shallow thinking rooted in outdated and often biased mental models of war.” He added that the campaign is focused on degrading Iran’s military capability and forcing behavioral change rather than occupying the capital.

Trending Stocks to Watch

Several stocks have seen notable movements in recent trading sessions:

• AleAnna (ANNA): Shares jumped nearly 20% overnight as Middle East tensions disrupted global LNG flows and pushed European gas prices higher.
• Microsoft (MSFT): Shares are on track for their sixth straight month in the red, with analysts warning about potential price increases for next-generation gaming consoles.
• MoonLake Immunotherapeutics (MLTX): Shares rose more than 4% after strong Phase 3 trial results for its lead skin disease drug.
• Ondas Holdings (ONDS): Shares fell to their lowest levels in three months amid broader market weakness.
• Reddit (RDDT): Shares fell to their lowest levels since June 2025 following warnings about slowing U.S. visitor growth and geopolitical impacts on digital advertising spending.

Global Market Performance

In broader markets, the yield on the benchmark 10-year U.S. Treasury note ended last week near 4.44%, rising as high as 4.48%, its highest level since July 2025. Analysts are reassessing expectations for Federal Reserve policy. The Kobeissi Letter warned that bond yields could push above 4.5% without intervention, noting that the bond market is approaching crisis levels.

Gold traded near $4,490 per ounce, with the VanEck Gold Miners ETF (GDX) showing signs of being oversold. Asian markets were weaker, with the MSCI Asia Pacific Index excluding Japan down 0.3%.

Investors will closely watch remarks from Federal Reserve Chair Jerome Powell and New York Fed President John Williams for signals on the policy outlook.