US pre-open: Futures fall as Middle East conflict lifts commodity prices

By 0643 ET, Dow and S&P 500 futures were showing losses of 0.4% each, while the Nasdaq slipped 0.5%.

After hitting a record high close of 6,144.15 on 19 February, the S&P 500 had lost 10.1% of its value as of Thursday last week, as trade war risks weighed on the outlook for global economic growth.

Since then, markets have rebounded strongly, with the index rising 2.8% over the past two days alone to settle at 5,638.94 on Monday as investors hunted for bargains following the recent sell-off.

Commodity prices were on the rise on Tuesday after military strikes resumed in Gaza, with more than 400 people reportedly killed by Israeli attacks. WTI crude was up 1.3% at $68.45 a barrel on speculation that a further escalation of conflict across the region could affect supplies; while safe-haven demand was pushing gold prices to new record highs, with Comex futures up 0.9% at $3,031.80 an ounce.

Investors were also beginning to look ahead to central bank meetings from across the globe, most notably the Federal Reserve which concludes its policy meeting on Wednesday afternoon.

"The S&P500 is coming up against some key resistance at 5,700, which may limit further upside for the main US blue chip index until after tomorrow’s FOMC decision," said Kathleen brooks, research director at XTB.

"We don’t expect the Fed to change policy on Wednesday; but the updated economic forecasts and dot plot will be crucial for the direction of asset prices later this week."