U.S. stock futures fell sharply early Monday, with major market indexes set to open deep in the red after joint U.S. and Israeli attacks on Iran over the weekend prompted broad retaliatory strikes and threatened a spiraling and economically disruptive war in the Middle East.

Futures tied to the S&P 500 sank more than 1%, the Nasdaq slumped 1.4%, and the Dow was set to open down more than 500 points. Gold rose 3% toward a new record high, while the VIX — Wall Street’s gauge of market fear and volatility — jumped a whopping 18%. Crude oil futures spiked about 8%, potentially signaling higher pump prices to come.

Here's what to know.

The sudden eruption of the Middle East conflict saw stocks drop around the world and introduced new uncertainty into global markets.

Over the weekend, President Donald Trump ordered U.S. military strikes across Iran, targeting more than 1,000 sites. Israeli fighter jets and American warships led the attacks, using Tomahawk missiles. It came after Trump said just days earlier in his State of the Union address that he favored “diplomacy” in Iran and despite numerous campaign promises to avoid foreign entanglements.

Trump’s rationale for the launch of military strikes came in the form of a video posted to his Truth Social account at 2:30 a.m Saturday. Stated U.S. goals for the attacks include stopping Iran’s nuclear program and bringing about regime change.

As of early Monday, four American service members have died, and within Iran, casualties are also rising — including the leader of the 1979 Iranian revolution, Ayatollah Ali Khamenei, several high-ranking Iranian government officials, and at least 100 civilians killed at an elementary school in the southern part of the country. Hundreds more Iranian officials and civilians are believed dead, even as counts vary according to state and NGO sources.

Responding to the U.S. attacks, Iran and militias allied with Iran launched a series of drone and missile attacks across the Middle East, targeting U.S. military assets in Israel, Kuwait, Bahrain, and United Arab Emirates.

Also grabbing headlines over the weekend? What’s being described as a fundamental clash between ethical AI development and the Pentagon’s demand for unconditional access to systems capable of mass surveillance of U.S. citizens and the operation of fully autonomous AI weapons.

The eruption of open conflict between the Pentagon and Anthropic, maker of the popular AI system Claude, comes after Defense Secretary Pete Hegseth dubbed Anthropic a “supply chain risk” when the company insisted on adherence to two contractual red lines which limit Pentagon access to company user data and potential weapons developed with the technology. Anthropic has now sued the government in an attempt to remove the \\"supply chain risk\\" label.

For investors, a major question is whether multi-billion dollar investments across the industry are safe enough to continue. If the U.S. government will attempt to destroy a company's business over contractual disagreements, the risk profile of industry investments changes drastically, and at a moment when the U.S. is competing to outpace China in the AI development race.

In recent weeks, and especially following last week's showdown with the Pentagon, Claude's Apple App Store popularity has surged.