Sunday evening trading kicked off on a sour note for risk assets. Dow Jones futures dropped more than 160 points, with the S&P 500 down 25 points and the Nasdaq retreating 100 points. This reversal wipes out some of the momentum from last week, where the Dow had clawed back nearly 500 points on Friday to secure a 0.3% weekly gain after a three-week losing streak.
The catalyst? Geopolitics. President Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, a move that sent energy markets into overdrive. Brent crude spiked as much as 2% to $106.29 a barrel, while West Texas Intermediate climbed toward the $94 mark. It’s a sharp uptick, especially considering Kpler data showing Saudi exports hit 6 million barrels per day in September, up from 3.4 million in August.
Talks aren’t dead, exactly. Trump told Axios he expects negotiations to continue this week, but a Wall Street Journal report suggests the bombing campaign in Iran could resume after the November mid-term elections. That uncertainty is keeping a lid on risk appetite. Meanwhile, industry sources told Reuters that the East-West pipeline has resumed operations at low volumes, slowly ramping up—but it’s not enough to offset the geopolitical premium on oil.
The week ahead is a gauntlet for macro traders. September 30 marks the end of Q3 2026, and the data slate is dense. Tuesday brings speeches from Chicago Fed President Austan Goolsbee and New York Fed President John Williams, both of whom have been alluding to a hawkish stance. Dallas Fed President Lorie Logan speaks Friday. Wednesday is heavy: the third revised estimate of Q2 GDP, wholesale and retail inventories, and the PCE inflation report. Thursday brings jobless claims and September manufacturing PMI.
Friday is the big one. The monthly jobs report is out, with estimates projecting 75,000 to 90,000 new payrolls, alongside factory orders data. Fed officials have been clear last week that they want more rate hikes to tame inflation. If the jobs data comes in hot, expect the hawkish bias to solidify, putting further pressure on equities and pushing yields higher. Traders need to position accordingly.