Stock futures were lower Monday while oil was on the rise after fresh

U.S. strikes on Iran.

U.S. forces attacked two Iranian rocket launchers in the Strait of Hormuz Sunday, marking the first American strike in weeks.

"The exchange was limited, but it marks the first U.S. strike on Iran's forces in more than a month and highlights the risk of renewed escalation," Danske Bank said.

Brent crude futures were trading above $90 a barrel, rising over 3%.

Meanwhile, Treasury yields declined on Monday after jumping Friday in response to Federal Reserve Chairman Kevin Warsh's Jackson Hole remarks.

"While Warsh did not send clear signals on the timing of rate changes, the speech was supportive of market expectations of a rate hike during the fall--whether in September or by year-end," said SEB.

This week will see the end of second-quarter earnings season with Broadcom and Dell among the companies releasing results. Economic data will come into focus with the ISM manufacturing report due on Tuesday and payrolls data on Friday.

Stocks to watch

Aon is nearing an agreement to buy USI Insurance from private-equity giant KKR for roughly $17 billion, including debt, the Journal reported. Shares of Aon ticked lower in thin premarket trading, while KKR's shares rose slightly.

Chevron, ConocoPhillips, Occidental Petroleum: Shares of energy companies jumped premarket as Brent crude futures surged past $90 a barrel.

Intel, Nvidia, Broadcom: Shares of chip makers inched higher premarket, on track to recover some of the losses recorded at the end of last week.

PG&E sank 8% premarket after lawmakers over the weekend introduced wildfire legislation that left out Gov. Gavin Newsom's proposal to block insurance companies from suing utilities for wildfire-related claims.

Watch For:

Texas Manufacturing Outlook Survey for August

Today's Top Headlines/Must Reads:

- The Sudden Unraveling of Wall Street's Momentum Trade

- Corporate America's Profits Are Booming-and Signal More Good Times Ahead

- Can Apple's New CEO Rev Up the Steve Jobs Innovation Engine?

MARKET WRAPS Forex:

The dollar edged lower Monday following strong gains on Friday. "Fed Chairman Kevin Warsh's Jackson Hole speech was the clear market mover," BNY said.

Commerzbank said any rise in the U.S. dollar could be limited. Ahead of September's Fed meeting will be Friday's U.S. jobs data, where another weak figure could "trigger a significant [dollar] correction."

Bonds:

Eurozone government bond yields edged higher, taking the 10-year Bund yield to a 15-year high, according to LSEG data.

Treasury yields edged lower, trimming some of Friday's massive rises in short-end yields following Federal Reserve Chairman Kevin Warsh's hawkish speech in Jackson Hole.

Energy:

Oil prices rose Monday as a resurgence in Middle East hostilities boosted concerns over supply disruptions in the region. November Brent rose 3.4%, while October WTI gained 3.3%

Metals:

Gold declined in early trade. The precious metal's current pullback below the $4,600 level is likely to be a natural correction on profit-taking after a strong upward rally, said XS.

Copper

Copper was little changed in early trade. Strong fundamentals continue to provide support while growing expectations for the Fed's rate increases cap the upside, Guangzhou Futures said.

Iron ore

Iron ore was higher in early trading. The commodity's supply and demand dynamics have improved, Nanhua Futures said.

TODAY'S TOP HEADLINES

Don't Count Shein Out Just Yet

Fast-fashion giant Shein is making a bold choice, going ahead with its public debut when its growth is looking shabby. While the company's shares aren't a bargain, they aren't castoffs either.

The Singapore-based giant, which was founded in China and still makes the majority of its clothes there, will be targeting a roughly $27 billion valuation in its Hong Kong initial public offering on Tuesday, a long way off from the nearly $100 billion it once commanded.

Corporate America's Profits Are Booming-and Signal More Good Times Ahead

Profits are booming at America's biggest companies-and their leaders say that likely won't change soon.

From Target and J.M. Smucker to farm-equipment maker Deere, companies spanning the breadth of the U.S. economy are ringing up heftier sales and earnings. In recent days, many have raised financial outlooks for the year, citing robust sales as just one of the reasons.

China's Biggest Airlines Post Over $1 Billion Loss in First Half as Fuel Shock Bites

China's three largest state-owned airlines posted deeper losses in the first half, dragged by weak domestic pricing and high fuel costs spurred by the Middle East conflict.

Air China, China Southern Airlines and China Eastern Airlines recently posted combined first-half net losses of about 8.17 billion yuan, equivalent to $1.21 billion, after warning in July that the total figure could be close to 9 billion yuan.

The $5.5 Billion Perk SoftBank's Data-Center Venture Offered to Land OpenAI

SB Energy offered OpenAI a major perk to land it as a data-center tenant ahead of the SoftBank-backed company's initial public offering.

OpenAI was issued warrants worth an estimated $5.5 billion in SB Energy-a company it previously invested in, according to draft IPO documents reviewed by The Wall Street Journal.

China's Official Activity Gauges Hint at Impending Turnaround

An official gauge of China's manufacturing activity rebounded by more than expected in August as output and market demand recovered, suggesting that the slowdown in manufacturing may have hit bottom in July.

China's official manufacturing purchasing managers index in August rose to 49.8 from 49.2 in July, the National Bureau of Statistics said on Monday.

Buckle Up for Wall Street's Worst Month

September tends to be Wall Street's worst month, and this year may be no different.

Based on historical returns data, all three major indexes see their worst average returns of any month in September.

Private Credit Stocks Are Rebounding, but Shared Loans Bring Growing Risk

Private credit stocks have climbed in recent months from the ditch where investors dumped them earlier this year.

That doesn't mean investors can stop worrying.

Japan Targets Record Defense Spend as China Pressure Grows

Japan plans to shift more of its military spending toward drones and missiles and build up supplies of ammunition, as officials eye a record defense budget for the next fiscal year.

Japan's Ministry of Defense said Monday that it is seeking 8.9 trillion yen, or around $55.6 billion, for the year beginning in April.

G20 Warned Of Growing Threat to Financial Stability Posed By New AI Models

New artificial-intelligence models pose a growing threat to the stability of the global financial system and measures to ensure their safe release should be a priority, the head of the G20's Financial Stability Board wrote in a letter to regulators from the world's leading economies Monday.

Addressed to central bank governors and treasury chiefs from the Group of 20 largest economies, the letter from Andrew Bailey follows a series of incidents over recent months in which new models from companies including OpenAI, Anthropic and Meta Platforms have used the internet to hack other organizations.

Fighting Flares in Middle East After U.S. Strike on Iranian Rocket Launchers

WASHINGTON-U.S. forces attacked two Iranian rocket launchers in the Strait of Hormuz on Sunday, the U.S. Central Command said, marking the first American strike in weeks and heightening the risk of a return to all-out conflict in a region already battered by war.

The command said that the Iranian launchers, which were deployed on Larak Island, were preparing to fire rockets filled with sea mines into the strait when they were struck.

Icelanders Reject EU-Membership Talks

Icelanders voted against restarting negotiations on joining the European Union in a nationwide referendum Saturday, rejecting arguments that their small island nation should pull closer to Brussels after President Trump's threats to annex Greenland.

Results published by national broadcaster RÚV on Sunday said 52.8% of voters didn't want their government to reopen talks with the EU, compared with 47.2% who favored talks. The government said it would respect the outcome.

Write to priscila.barrera@wsj.com

TODAY IN CANADA Earnings:

Nothing major scheduled

Economic Indicators (ET):

0830 Jul Model-based Principal Field Crop Estimates Stocks to Watch:

PTC Therapeutics, Inc. Entered Into Asset Purchase Agreement With Sangamo Therapeutics, Inc.; Agreed to Acquire From Sangamo Assets Primarily Related to ST-920, an AAV Gene Therapy Product Candidate for Fabry Disease; To Assume Certain Specified Liabilities of Sangamo; Upfront Payment of $111 Million, Plus Up to an Additional $100 Million in Contingent Milestone Payments

Voestalpine Is Building a New Production Facility in Ontario, Canada; Further Expands Global Presence in the Railway Systems Business Segment; Long-Term Supply Pact Was Signed With Canadian National; Production at the New Plant Will Be Ramped Up Gradually; Facility Is Set to Be Fully Operational in Fall 2027; Production Facility in Southern Ontario to Create About 30 New Jobs

Expected Major Events for Monday 01:00/JPN: Jul Steel Imports & Exports Statistics

04:30/JPN: Jul Preliminary Report on Petroleum Statistics

05:00/JPN: Jul Housing Starts

05:00/JPN: Jul Construction Orders

08:00/GER: Aug North Rhine Westphalia CPI

08:00/GER: Aug Saxony CPI

08:00/GER: Aug Hesse CPI

08:00/GER: Aug Baden-Wuerttemberg CPI

08:00/GER: Aug Bavaria CPI

08:00/GER: Aug Brandenburg CPI

12:00/GER: Aug Provisional CPI

12:30/CAN: Jul Model-based Principal Field Crop Estimates