US Futures Flat as Geopolitical Tensions Resurge, Oil and Defense Stocks Tilt Lower

US futures remained flat at the open, with the S&P 500 futures up just 0.05% and Nasdaq 100 futures flat, as traders recalibrated risk exposure following a shift in geopolitical outlook. The retreat in conviction around a potential war resolution has intensified focus on risk-sensitive assets, particularly energy and defense equities. The benchmark West Texas Intermediate crude futures (CL=F) dropped 1.7% to $78.20 per barrel, reflecting renewed supply concerns amid escalating regional instability. This marks the second consecutive day of declines, with the oil benchmark losing over 3.2% in the past 48 hours. The move signals growing market skepticism over the stability of energy flows from key producing regions. In equities, defense stocks underperformed, with shares of Lockheed Martin (LMT) and Raytheon Technologies (RTX) each slipping 2.4% and 1.9% respectively. The broader defense sector index declined 1.6%, while major tech firms like Apple (AAPL) saw modest losses of 0.6%, pressured by heightened volatility and a rise in the CBOE Volatility Index (^VIX), which climbed to 17.3—its highest level since January. The repricing of risk is now influencing portfolio allocations, with investors rotating into bonds and gold as safe-haven assets. The 10-year Treasury yield dipped to 4.21%, while gold futures rose 0.8% to $2,345 per ounce. The shifts suggest a broader market reevaluation of near-term economic and political risks.