US Stock Futures Slide Amid Escalating Iran Tensions and Hawkish Rate Outlook

US stock index futures fell on Monday as tensions between the US and Iran escalated, pushing oil prices higher and exacerbating inflation concerns. This comes at a time when interest-rate expectations have turned more hawkish.

The Federal Reserve's upcoming meeting is expected to be closely watched, with traders now seeing a nearly 60% chance of a rate hike in September, up from 41.4% just last week. This sharp increase follows comments from Fed Chair Kevin Warsh, who stated that policymakers may need to raise rates if inflation doesn't ease to the central bank's 2% target.

Warsh's remarks at the Jackson Hole symposium on Friday were seen as more hawkish than expected, suggesting that policy easing is not on the horizon. The ambiguity surrounding recent data has raised concerns about the upcoming employment report due on September 4.