U.S. Futures Slip as Iran Rejects Ceasefire and Trump Deadline Looms

U.S. stock index futures edged lower Monday evening as investors remained on edge over escalating tensions in the Middle East, with President Donald Trump's deadline for Iran to reopen the Strait of Hormuz fast approaching after Tehran turned down a ceasefire proposal.

S&P 500 futures slipped 0.2% to 6,640.50, Nasdaq 100 futures dropped 0.3% to 24,290.75, and Dow Jones futures held relatively steady near 46,937.0 as of 8:15 p.m. ET. The after-hours dip followed a broadly positive session on Wall Street, where the Dow gained 0.4%, the S&P 500 rose 0.5%, and the Nasdaq Composite climbed 0.5%.

Diplomatic efforts in the Middle East appeared to be unraveling after Iran rejected a U.S.-backed 45-day ceasefire agreement brokered with support from Pakistan, Egypt, and Turkey. The deal included the reopening of the Strait of Hormuz, a vital shipping corridor responsible for roughly one-fifth of the world's oil supply. Iran countered with demands for a permanent ceasefire, sanction relief, war reparations, and binding security guarantees — conditions that made a quick resolution unlikely.

Trump intensified pressure by warning that continued non-compliance past an 8 p.m. ET Tuesday deadline could result in sweeping U.S. military strikes targeting Iranian infrastructure. The ongoing disruption to oil flows through the Strait has driven crude prices sharply higher, adding fuel to already mounting inflation fears.

On the economic data front, the ISM Non-Manufacturing PMI for March fell to 54.0 from February's 56.1, falling short of the 54.8 consensus estimate. While the reading still indicated expansion, the report revealed softer business activity and a weakening labor component. Most concerning was the prices paid index, which recorded its largest single-month surge in more than 13 years, reflecting deepening cost pressures tied to energy prices and global supply chain disruptions.