Stock Market Today: Stocks slide, oil surges as attacks on Israel rattle global markets

U.S. equity future moved lower Monday, while the dollar built gains against its global peers and oil prices surged, as investors piled into safe-haven assets and worried about energy supply disruption following the deadly weekend attacks in Israel.

More than 1,100 people have reportedly been killed in the region since Hamas fighters launched their surprise Saturday attack on southern Israel from Gaza, capturing dozens of Israeli citizens and soldiers and firing hundreds of rockets aimed at major cities. 

Rockets have also been fired from Lebanon, on Israel's north border, by the Hezbollah militant group, escalating what is now seen as the worst conflict in the regional in at least five decades.

Oil prices surged in late Sunday trading following the attacks, which have been linked in part to Iran – a longtime supporter of Hamas – with Brent crude futures for December delivery rising as much as $3 barrel before easing to $86.91, a $2.33 gain from Friday's levels, in early Monday trading.

“The events in this region are now directly impacting financial markets worldwide, which, as ever in times of increased volatility, is immediately prompting some investors into selling off riskier parts of their portfolios, such as stocks and some currencies," said Nigel Green, CEO of London-based financial advisor deVere Group.  

“Oil has a disproportionate impact on global financial markets due to its pivotal role in the world economy, its interconnectedness with various sectors, and its potential to influence broader economic conditions and investor sentiment," he added

Safe-haven assets were also on the move, with the U.S. dollar index rising 0.36% against a basket of its global currency peers to trade at 106.413 in overnight dealing and U.S. Treasury bond yields, which move in the opposite direction of prices, falling as well. 

Some of those moves were also linked to reaction to Friday's better-than-expected jobs report, which indicated that 336,000 new hires were added to the economy last month, nearly double Wall Street forecasts, but also showed that average hourly wage growth slowed from its late-summer pace. 

That appears to have muted bets on near-term Federal Resere rate hikes, with bets on a November increase pegged at just 21.7% and the odds of a December move trading at around 36%. 

Those levels could be tested this week, however, when minutes of the Fed's September meeting are published on Wednesday.

Markets will also digest the first major earnings releases of the third quarter reporting season, with updates expected from JPMorgan JPM, Wells Fargo and Citigroup C.

Collective S&P 500 earnings for the three months ending in September are expected to grow 1.3% from last year to a share-weighted $464.4 billion, according to Refinitiv data, representing the strongest quarterly gain of the year.

Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is now up 0.48% for the month, are indicating a 20 point pullback while those linked to the Dow are priced for a 126 point decline.

The tech-focused Nasdaq is set to open 95 points lower.

In overseas markets, holidays in Japan and South Korea sapped liquidity in an otherwise defensive session, with the region-wide MSCI ex-Japan benchmark falling 0.05% into the close of trading.

In Europe, the Stoxx 600 gained 0.18%, with support from defensive sectors such as healthcare and utilities alongside the run-up in energy stocks. Britain's energy-heavy FTSE 100, meanwhile, gained 0.53% in early London trading.

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