US stock futures pulled back on Monday after a weekend of switchback developments reignited US-Iran tensions, undermining optimism for Middle East peace and leaving investors bracing for more uncertainty.

Dow Jones Industrial Average futures (YM=F) dropped 0.7%. Meanwhile, contracts on the S&P 500 (ES=F) and the Nasdaq 100 (NQ=F) both moved down about 0.6%.

The rapid escalation in tensions comes after the US Navy seized an Iranian ship — blowing a hole in its engine room, according to President Trump. For its part, Iran fired at vessels and abruptly stopped traffic in the Strait of Hormuz on Saturday, abandoning its promise to allow some to pass as its said the US had broken a ceasefire deal.

That renewed concerns about oil supply disruptions in the critical waterway, and in turn revived worries about inflation and clouded prospects for talks to end the war. The Hormuz standoff is just one of the several sticking points in US-Iran negotiations.

Oil prices soared over 6% on Monday, but remained well below the key $100 level. US benchmark West Texas Intermediate crude futures (CL=F) traded at around $88 per barrel, while global benchmark Brent crude (BZ=F) changed hands just above $96.

Looking ahead for the week, investors will parse another busy stretch of earnings, with major names including Tesla (TSLA), Intel (INTC), and United Airlines (UAL) set to report in the days ahead, offering the next test for markets navigating record stock rises and increasing geopolitical risk.

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