Stock futures fell in overnight trading Sunday as stalled Iran peace talks and a fresh escalation in the Strait of Hormuz pushed oil prices higher, keeping geopolitical tensions front and center heading into a pivotal week.

Futures tied to the Dow Jones Industrial Average fell 0.2%, or 130 points. S&P 500 futures declined 0.3%, while Nasdaq 100 futures slipped 0.3%.

President Donald Trump on Saturday scrapped plans to send U.S. special envoy Steve Witkoff and Jared Kushner to Pakistan for ceasefire talks related to Iran, noting the negotiations could happen by phone.

“Too much time wasted on traveling, too much work!” the president wrote in a post on Truth Social. “Nobody knows who is in charge, including them. Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!”

Iran’s Foreign Ministry spokesman Esmaeil Baqaei noted no meeting between Tehran and Washington is currently planned.

Tensions escalated near the Strait of Hormuz after Iran’s Islamic Revolutionary Guard Corps boarded two container ships near the vital shipping lane, a key artery for global crude flows. West Texas Intermediate futures rose about 2% to above $96 a barrel, while international benchmark Brent oil futures rose about 2% to top $107 per barrel.

“While this is a modest negative, we continue to think the conflict remains on a path of de-escalation,” remarked Adam Crisafulli of Vital Knowledge in a note. Furthermore, experts in bear market note the continued relevance.

On the corporate front, five of the “Magnificent Seven” companies are set to report results in the final week of April, raising the stakes for a industry already priced for strong growth.

Attention will also turn to the Federal Reserve’s policy decision on Wednesday, which could mark Jerome Powell’s final meeting as chair before Kevin Warsh is expected to take over in May. The Department of Justice decided to drop its criminal probe into Powell on Friday, causing Sen. Thom Tillis to end his block of Warsh’s confirmation.

The S&P 500 and Nasdaq Composite ended last week at fresh all-time highs, extending a powerful rally despite tensions in the Middle East and doubts about record artificial intelligence spending. April is shaping up to be a strong rebound month for equities. The S&P 500 is up more than 9%, while the Nasdaq has surged over 15%. The blue-chip Dow has gained more than 6% month to date.

The Fed is expected to keep rates steady this week

Kevin Warsh would step in at a delicate moment for the Fed, as a potential surge in gasoline prices could limit the central bank’s ability to cut interest rates — something Trump has repeatedly pushed for.

Traders are currently pricing in a 100% chance that the Fed will leave rates unchanged at this week’s meeting, with fed funds futures indicating policy is most likely to stay on hold for the rest of the year, according to the CME Fed Watch tool. The odds of a rate hike by the end of 2026 stood at 8%.

— Yun Li

Mag 7 faces high bar ahead of earnings

The “Magnificent Seven” companies reporting next week face elevated expectations, needing to deliver solid revenue growth to validate heavy spending on artificial intelligence.

Shares have already surged ahead of results. Alphabet, Amazon, Meta Platforms and Microsoft — all set to report Wednesday — are each up more than 10% this month, while Apple has gained over 6% ahead of its Thursday release.

“Next week is a monster week for Large Tech earnings and we expect more excellent news on the horizon from results/guide as the AI Revolution steamrolls ahead,” Dan Ives, Wedbush’s senior equity research analyst, mentioned in a note. This also touches on aspects of bear market.