By JBizNews Desk
May 10, 2026
U.S. stock futures fell Sunday night after President Donald Trump rejected Iran’s latest counterproposal aimed at ending the nearly three-month-old war, reigniting investor anxiety over energy markets and the growing economic risks tied to the continued closure of the Strait of Hormuz.
Futures tied to the Dow Jones Industrial Average dropped roughly 143 points, or 0.3%, during overnight trading. Futures linked to the S&P 500 and Nasdaq 100 also slipped approximately 0.3% after Trump announced on Truth Social that he had reviewed and rejected Tehran’s latest response in ongoing peace negotiations.
The White House did not immediately disclose the full contents of Iran’s proposal, though traders interpreted Trump’s rejection as a sign that a near-term ceasefire may be less likely than markets had hoped just days earlier.
The overnight pullback comes after a remarkably strong rally across U.S. equities last week.
The S&P 500 and Nasdaq Composite surged more than 2% and 4%, respectively, recording their sixth consecutive weekly gains — the longest winning streak for both indexes since 2024. The Dow Jones Industrial Average rose 0.2% for the week, marking its fifth gain in six weeks.
Markets had closed Friday at record levels after the Bureau of Labor Statistics reported that nonfarm payrolls increased by 115,000 jobs in April, more than doubling economists’ consensus expectations of roughly 55,000 according to a survey conducted by Dow Jones.
The stronger-than-expected labor report briefly reassured investors that the U.S. economy remained resilient despite mounting geopolitical and inflationary pressures tied to the Iran conflict.
But the war — and the continued disruption of oil flows through the Strait of Hormuz — remains the dominant macroeconomic force hanging over global markets entering the new trading week.
Roughly 20% of the world’s oil supply normally passes through the narrow waterway connecting the Persian Gulf to global shipping routes. Since the conflict escalated, sustained disruption in the region has driven crude prices sharply higher and intensified fears of broader inflationary spillovers across the global economy.
The national average gasoline price climbed to approximately $4.54 per gallon as of Friday, according to data from the American Automobile Association, representing a 44% increase from a year earlier.
Higher fuel costs have already begun weighing heavily on consumers.
The University of Michigan’s closely watched consumer sentiment index recently fell to a record low of 48.2, reflecting growing financial stress among households facing rising gasoline, transportation, and grocery costs.
Oil markets reacted immediately to Trump’s rejection of Iran’s latest proposal.
West Texas Intermediate crude futures moved higher Sunday night, reversing some of the declines seen earlier in the week when optimism surrounding potential peace negotiations briefly pushed prices below $100 per barrel.
Brent crude, the international oil benchmark, had stabilized near $100 through Friday trading but is widely expected to face renewed upward pressure when Asian markets reopen Monday.
Wall Street strategists remain divided over how severely the energy shock may ultimately impact the broader U.S. economy.
Rick Rieder, Chief Investment Officer of Global Fixed Income at BlackRock, offered a relatively measured assessment of the market’s resilience despite the geopolitical risks.
“The economy may slow somewhat from its prior path, due to the Iran war and subsequent oil price shock,” Rieder said, “but there are many much larger structural components that should keep the aggregate economy in much better shape than many people expect.”
Economists at JPMorgan, however, warned in a client note Thursday that conditions inside global energy markets are becoming increasingly fragile.
“The supply buffers that have insulated the oil market from the war are eroding,” the bank wrote, adding that analysts expect “increasing signs of demand destruction as energy product consumers adjust to rising prices.”
Investors now turn toward a critical week of inflation data that could significantly influence expectations surrounding the Federal Reserve’s next policy moves.
The Bureau of Labor Statistics is scheduled to release both the Consumer Price Index and Producer Price Index this week, reports expected to provide the clearest evidence yet of how the Iran conflict and rising oil prices are filtering into broader inflation across the economy.
Federal Reserve officials are increasingly confronting a difficult balancing act: inflation expectations are climbing again as consumer confidence deteriorates and growth risks begin rising simultaneously.
Markets will also continue monitoring corporate earnings for signs that rising energy costs and geopolitical instability are beginning to pressure business operations.
Under Armour and Cisco Systems are among the companies scheduled to report results this week, with investors closely watching for any revisions to guidance tied to higher transportation costs, supply-chain disruptions, or weakening consumer demand.
For now, markets remain caught between two competing forces: strong economic momentum inside the United States and escalating geopolitical risks overseas.
Whether investors continue focusing on resilient corporate earnings and labor markets — or shift toward fears of another prolonged energy-driven inflation shock — may largely depend on what unfolds next between Washington and Tehran in the days ahead.
— JBizNews Desk
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