Tehran warned that the US attack had expanded the scope of its military action. Oil prices jumped in a volatile session amid rising concerns around Iran shutting the Strait of Hormuz, a key oil supply route. Brent futures were up 1.2% at $77.91 a barrel as of 12h22 CAT. Energy stocks rose in premarket trading, tracking a surge in crude prices. Shares of energy majors Chevron rose 1.5% and Exxon gained 1.9%.

Defense stocks also rose, with Lockheed Martin up 0.5% and RTX Corporation gaining 1.1%.

"There is tension but not trauma as investors monitor developments in the Middle East," Richard Hunter, Head of Markets at Interactive Investor, said in a note. As markets grapple with existing price pressures from President Donald Trump's tariffs, the oil price volatility added a new layer of inflation concerns as the 90-day suspension for US tariffs nears.

At 14h:43 CAT, Dow E-minis were down 98 points, or 0.23%, S&P 500 E-minis were down 10.25 points, or 0.17%, and Nasdaq 100 E-minis were down 45.75 points, or 0.21%

Among other movers, Tesla rose 0.5% after the EV-maker deployed 10 self-driving taxis in Texas, marking the first time Tesla cars without human drivers carried paying riders. 

Shares of US carriers were mostly down, with Delta Air Lines falling 1.1%, and American Airlines losing 1.3%
Shares of Estée Lauder added 2.3% in premarket after Brokerage Deutsche Bank upgraded the cosmetic giant to "buy" from "hold".
Following a strong rally in equities last month that pushed indexes close to their record levels, investor momentum was bruised by rising geopolitical tensions. The benchmark S&P 500 index remains about 3% below its record level.

Among major economic indicators, attention will be on US core PCE data and final GDP reading, set to be released later in the week.
Investors will also closely watch US Federal Reserve Chair Jerome Powell's two-day semiannual testimony before Congress, as lawmakers are expected to question the top policy maker on a range of topics, including interest rates and tariffs.

This comes after the central bank kept interest rates unchanged in its June monetary policy meeting but flagged inflationary risks due to higher trade duties.

--Reuters--