Stock market today: Dow, S&P 500, Nasdaq futures fall as US strikes Iran, rate-hike bets jump

U.S. stock index futures dropped on Monday morning as escalating geopolitical conflict in the Middle East rattled investor sentiment. The downturn followed U.S. military strikes against Iranian rocket launchers preparing to deploy mines in the Strait of Hormuz, which immediately pushed crude benchmarks higher. Brent crude surged past $88 per barrel, intensifying concerns that higher energy costs will sustain persistent inflationary pressures. The geopolitical tensions coincided with rising expectations of tighter Federal Reserve monetary policy. Following hawkish commentary from central bank officials warning that inflation remains elevated, market pricing for a 25 basis point rate hike at the September policy meeting climbed to 62%, up substantially from approximately 40% the prior week. Simultaneously, equity markets face potential seasonal headwinds as Wall Street transitions out of its summer lull. The CBOE Volatility Index touched a low of 14.13 before historical seasonal trends typically drive implied volatility higher into September and October, setting up a potentially turbulent stretch as investors await the Labor Department's monthly jobs report.