A lot of macro developments happened over the weekend that investors will probably focus on when markets open.
Here are three that stand out.
1. Oil shock
Oil prices surged past $100 after supply disruptions in the Middle East and concerns about shipping through the Strait of Hormuz. Brent crude climbed more than 27 percent in a short period.
Higher oil prices often lead to higher inflation and can delay central bank rate cuts.
2. Global market volatility
Asian markets reacted quickly. Japan's Nikkei fell about 7 percent and South Korea dropped more than 8 percent after the oil surge triggered global risk-off sentiment.
When global indexes drop together, US markets sometimes follow in the next session.
3.Inflation expectations
Economists are warning that prolonged conflict could push inflation higher again, which could complicate central bank policy and economic growth forecasts.
For stock investors this creates a mixed environment.
Higher oil can benefit energy producers but tends to pressure:
* airlines
* consumer discretionary stocks
* growth tech stocks sensitive to interest rates
Meanwhile defense and energy sectors often see stronger demand during geopolitical tensions.
Markets are now trying to figure out whether this is a short-term shock or the beginning of a longer energy disruption.
Which sector do you think reacts the most if oil stays above $100 for a few months?
Not financial advice.