U.S. stock futures showed modest gains on Monday, reflecting cautious optimism despite mounting tensions between Israel and Iran alongside lingering economic uncertainties. Meanwhile, oil prices climbed once more after a wave of weekend attacks, placing the Middle East crisis at the forefront ahead of the upcoming Group of Seven (G7) summit in Canada. Separately, activist investor Barington Capital Group announced plans to push for significant changes at Victoria’s Secret, targeting the lingerie brand’s board.

Futures Climb Amid Mixed Market Sentiment

Early Monday, investors digested the recent escalation in Middle East hostilities while awaiting the Federal Reserve’s interest rate decision scheduled for later this week. By 3:36 a.m. ET, Dow futures had risen by 181 points (0.4%), the S&P 500 futures gained 29 points (0.5%), and Nasdaq 100 futures were up 113 points (0.5%).

Last Friday, Wall Street closed lower as intensified airstrikes between Israel and Iran heightened geopolitical risks and subdued market confidence. Defense stocks rallied in response, buoyed by anticipated military spending increases, while energy shares benefited from surging oil prices. Conversely, airline stocks declined due to concerns over rising fuel costs.

Some easing of worries came from recent inflation reports and stable weekly jobless claims, which helped soften fears about the economic effects of U.S. tariffs. Investors now look ahead to Wednesday’s Federal Reserve announcement, widely expected to hold interest rates steady and adopt a cautious approach to future hikes.

Oil Prices Rise on Renewed Middle East Conflict

Oil prices extended their gains Monday amid ongoing clashes in the Middle East. Brent crude futures increased 0.4% to $74.53 per barrel, while West Texas Intermediate (WTI) crude added 0.5%, reaching $71.64 per barrel after earlier spikes of over $4.

Over the weekend, Israel and Iran exchanged attacks resulting in civilian casualties and stoking fears of a broader regional war. Reports suggest Iran has declined U.S.-facilitated ceasefire talks, even as Israeli strikes continue. Israel also issued warnings to Iranian personnel near nuclear sites to evacuate, focusing military operations on missile facilities.

G7 Leaders to Address Regional Crisis

The escalating violence is expected to dominate discussions at this week’s G7 summit in Canada. Leaders are reportedly preparing a joint statement calling for de-escalation. German Chancellor Friedrich Merz highlighted the importance of balancing Iran’s nuclear ambitions with Israel’s right to self-defense, while maintaining open diplomatic channels.

At the same time, officials aim to avoid friction with U.S. President Donald Trump amid ongoing disputes over his administration’s tariffs. Canadian Prime Minister Mark Carney emphasized the summit’s focus on peace and security but hinted Ottawa might retaliate if the U.S. maintains steel and aluminum tariffs.

Victoria’s Secret Faces Pressure from Activist Investor

In corporate news, activist investor Barington Capital Group is gearing up to challenge the board of Victoria’s Secret (NYSE:VSCO), aiming to dismantle its shareholder rights “poison pill” strategy, according to Reuters. Holding over a 1% stake, Barington criticizes the lingerie brand’s underperformance since its 2021 spin-off from L Brands (NYSE:BBWI), with shares down about 55% this year.

The investor seeks major leadership changes to enhance shareholder value and address weak recent demand.