The benchmark US stock measures were pointing lower before the opening bell Monday after the US and Iran reportedly traded strikes for the first time in a month, while investors await fresh labor market data.
The S&P 500, the Dow Jones Industrial Average and the Nasdaq were down 0.2% each in premarket activity. The indexes finished Friday's trading session in the red.
The US Central Command said its forces struck two Iranian rocket launchers on Iran's Larak Island, multiple media outlets reported. A spokesperson for CENTCOM reportedly said that the attack was launched as Tehran's Islamic Revolutionary Guard Corps was observed preparing to launch rockets with sea mines into the Strait of Hormuz.
The attack is the first confirmed US military strike targeting Iran since late July and comes after Washington launched an economic campaign last week to cut off financial channels that support Iran.
The IRGC said Monday that it launched a retaliatory attack on two US bases in Jordan, according to Iranian media.
West Texas Intermediate crude oil spiked 3.8% to $86.54 a barrel before the open, while Brent gained 3.7% to $91.33.
Treasury yields were mixed in premarket action, with the two-year rate retreating 2.5 basis points to 4.33% while the 10-year rate rose 0.2 basis points to 4.72%.
Fresh labor market data is scheduled to be released later this week, beginning with the Job Openings and Labor Turnover Survey for July on Tuesday, followed by August's ADP employment report on Wednesday. The Challenger Job Cut and the government's nonfarm payrolls data, both for August, are due on Thursday and Friday, respectively.
In his debut Jackson Hole speech as Federal Reserve Chair, Kevin Warsh said Friday that inflation numbers were concerning, citing the central bank's preferred metric -- the personal consumption expenditure price index -- which was unchanged at 3.7% year over year in July.
"Warsh's Jackson Hole keynote speech kept his options wide open, but his comments suggest that he, like others on the committee, is close to concluding that inflation isn't moving back toward the 2% target quickly enough," Oxford Economics said in a report emailed to.
The odds of a quarter-point rate hike next month currently stand at 62%, up from 57% on Friday, according to the CME FedWatch tool. The probability that the Fed will keep the benchmark rate steady fell to about 38% from 43%.
US consumer sentiment dropped in August amid concerns that inflation will continue to be high for the "foreseeable future," final results of a University of Michigan survey showed Friday.
Monday's thin economic calendar has the Dallas Fed manufacturing survey for August at 10:30 am ET.
Broadcom (AVGO), Palo Alto Networks (PANW), Dell Technologies (DELL) and Snowflake (SNOW) are some of the major companies expected to release their latest financial results this week. Science Applications International (SAIC) posts its earnings before the bell Monday.
Gold declined 0.7% to $4,499 per troy ounce, while bitcoin decreased 0.5% to $78,457.
