US stock index futures dip as Middle East strikes worsen inflation fears

On Monday, August 31, Wall Street futures faced pressure as the U.S. and Iran resumed military attacks, driving oil prices up and intensifying inflation concerns amid an increasingly hawkish interest-rate outlook. The declines might set the tone for September, a typically weak month for equities, and are expected to heighten the stakes for the Federal Reserve's upcoming meeting.

Traders estimate a 60% chance of a rate hike at the September meeting, a significant jump from 41.4% a week earlier, following Fed Chair Kevin Warsh's more hawkish remarks during his first appearance at the Fed's Jackson Hole symposium on Friday. Warsh's comments, made at a time when recent data showed mixed inflation pressures, suggested that policy easing is not imminent.

The monthly U.S. employment report is set for September 4, as market participants grow increasingly nervous about the upcoming non-farm payrolls data on Friday, which is expected to be the focal point of the trading week amidst heightened monetary policy uncertainty. Nvidia was the sole gainer among the Magnificent Seven stocks, while other chipmakers such as Intel, Lam Research, and Texas Instruments also saw gains.

Energy stocks benefited from a 2% jump in Brent crude, with Halliburton and Valero Energy rising by 2.46% and 2.17%, respectively. Most crypto stocks were higher, and Bitcoin was trading above $78,000, with Coinbase and Strategy gaining between 0.97% and 1.92%, respectively.