Stock futures rebounded early Monday as investors were optimistic that the conflict between Israel and Iran may remain contained. The spike in oil prices due to the escalating conflict also eased. Dow Jones Industrial Average futures jumped 260 points, or 0.6%. S&P 500 futures added 0.7%, while Nasdaq 100 futures rose 0.8%. Traders have been closely watching the Middle East after Israel’s strike on Iran Friday. Iran launched missiles in retaliation, increasing the severity of conflict in the region. The attacks continued for a fourth day Monday, with the two countries targeting each others’ energy facilities, an escalation which could rattle the global economy and markets further in the new week. Iran said it is considering shutting down the Strait of Hormuz, a key route for the global oil market. Israel claimed on Monday to have achieved “aerial superiority” over Iran, according to a military spokesperson. “The market is taking comfort from the prospect that the conflict could stay in the limited war mode,” Krishna Guha, Evercore ISI’s vice chairman, said in a note Monday. “We assess this is possible but continue to anticipate the conflict will last for a few weeks in the base case and still see elevated risk of escalation that envelops energy and draws in the U.S.” The conflict prompted a sell-off in stocks on Friday, with the Dow tumbling more than 700 points in the session. All three of the major indexes dropped more than 1% in the trading day. Friday’s declines pulled the three indexes into red territory for the week. The Dow finished the week down 1.3%, while the S&P 500 and Nasdaq Composite lost 0.4% and 0.6%, respectively. Oil prices initially surged following Israel’s attack, weighing on risk assets. Gold prices also rallied, as the metal is considered a safe haven trade that investors flock to in times of market volatility. All of the ‘Magnificent Seven’ stocks were higher in premarket trading Monday as the pullback in oil prices caused investors to take on more risk again. Tesla was up nearly 2%, and Meta Platforms was up nearly 1%. Additionally, Palantir, which is viewed as a beneficiary of increasing global conflict, rose more than 2%. Investors are looking ahead to the Federal Reserve’s interest rate decision on Wednesday. Fed funds futures are pricing in a nearly 100% likelihood of the central bank keeping rates unchanged, per CME’s FedWatch tool, even as President Donald Trump has been pressuring Fed Chief Jerome Powell for a rate cut. Higher oil prices from the Middle East conflict likely further reduce the odds the Fed will ease monetary policy anytime soon. U.S. Treasury yields ticked higher Monday as global markets continue to react to deadly air strikes being exchanged between Israel and Iran. The 2-year Treasury yield rose more than 1 basis point to 3.971%. The yield on the benchmark 10-year Treasury was also more than 1 basis point higher at 4.436%. Asia-Pacific markets rose Monday, as investors assessed escalating Israel-Iran tensions and parsed a slew of data from China. China released its retail sales and industrial output figures for May. Retails sales jumped 6.4% from the previous year, while industrial output growth slowed to 5.8% year on year. Mainland China’s CSI 300 index ended the day 0.25% higher at 3,873.80, while Hong Kong’s Hang Seng Index added 0.7% to 24,060.99. Japan’s benchmark Nikkei 225 climbed 1.26% to end the day at 38,311.33, while the broader Topix index advanced 0.75% to 2,777.13. In South Korea, the Kospi index surged 1.8% to close at 2,946.66, while the small-cap Kosdaq increased by 1.09% to 777.26. Over in Australia, the S&P/ASX 200 ended the day flat at 8,548.40. The run-up in crude oil futures paused on Monday even after Israel struck two natural gas facilities in Iran over the weekend, raising fears that the war will expand to energy infrastructure and disrupt supplies in the region. U.S. crude oil shed 21 cents, or 0.3%, to $72.75 per barrel. WTI had touched as high as $77.48 a barrel overnight before pulling back. Global benchmark Brent was last down 32 cents to $73.91 a barrel. Gold fell on Monday as investors weighed the impact of the ongoing Israel-Iran conflict, while also focusing on the Group of Seven leaders meeting and the Federal Reserve policy decision later this week. Spot gold fell 0.5% to $3,415.36 an ounce, as of 0854 GMT, after hitting its highest level since April 22 earlier in the session. U.S. gold futures were down 0.5% to $3,434.50.