US stock futures sold off again on Tuesday morning after Israel and US jets launched new strikes on Iran, as the widening conflict stoked worries about full-on regional war.

Contracts on the S&P 500 (ES=F) dived 1.5%, while those on the Dow Jones Industrial Average (YM=F) also pulled back 1.5%. Nasdaq 100 (NQ=F) futures led the retreat, dropping 1.9%, as oil prices continued to rally on concerns about blocked supply.

The fresh wave of Israeli-led attacks has jolted markets that on Monday mostly managed to shake off the initial shock of the outbreak of US-Iran hostilities. The major US gauges staged a comeback from steep intraday losses to mostly close higher, as dip-buyers stepped in.

Tuesday's air strikes on Iran and Lebanon intensify a conflict that Wall Street expects to pressure global markets. The focus is now on Tehran's response after Iran targeted oil infrastructure and other targets across a huge swathe of the region, with at least nine countries reporting hits.

Crude prices (BZ=F, CL=F) continued to rise on concerns that hostilities could disrupt key supply routes and reignite inflation pressures. According to Reuters, the Strait of Hormuz had been closed, with threats made against vessels attempting to pass through the waterway.

The conflict entered its third day Monday following joint US-Israeli strikes that killed Iran’s Supreme Leader, Ayatollah Ali Khamenei. President Trump indicated the war could last four to five weeks, though he acknowledged it could extend longer, with strong potential for economic knock-on effects to spread in the US and beyond.

Investors are also watching corporate earnings. Retail will see the largest slew of results, with Target (TGT) scheduled to report Tuesday, while later in the week reports are expected from wholesale retailer Costco (COST).

Bloomberg reports:

Gold (GC=F) rose for a fifth day, as the escalating war in the Middle East upended global energy markets and drove investors to safer assets.

Bullion climbed as much as 1.1% to top $5,380 an ounce, adding to a gain of more than 3% over the previous four sessions as conflict reverberated across the region. President Donald Trump said the US would continue its military offensive for as long as it takes, and Israel announced a “wave of strikes” targeting Iran’s command centers. Tehran attacked oil and gas infrastructure and threatened shipping in the strategic Strait of Hormuz.

The resulting spike in energy prices has stoked inflation fears in the US, causing Treasuries to slump and raising the likelihood that the Federal Reserve will leave interest rates unchanged for longer. Traders are now pricing in a rate cut by September, later than previously estimated. While higher rates may weigh on gold as it doesn’t pay interest, they can also reinforce bullion’s role as a better store of value.

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Reuters reports:

OpenAI Chief Executive Sam Altman said on ‌Monday that the ChatGPT-maker ‌is working with the U.S. Department of ​Defense to make some changes in their agreement.

\\"We have been working with the DoW (Department of ‌War) to ⁠make some additions in our agreement to make our ⁠principles very clear,\\" Altman said in a post on ​X.

Here is re-post of an internal post:

We have been working with the DoW to make some additions in our agreement to make our principles very clear.

1. We are going to amend our deal to add this language, in addition to everything else:

\\"• Consistent with applicable laws,…

— Sam Altman (@sama) March 3, 2026

Altman said ​one of ​the additions to ‌the deal states that the Pentagon has affirmed OpenAI services will not be used by Department of War intelligence agencies (for example, ‌the NSA). Any services to those agencies would require a follow-on modification to our contract.

Last ​week, the ​AI firm announced a deal to deploy technology in the ​Defense ‌Department's classified network.

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