Investing.com - U.S. stock futures were little changed early Tuesday as investors remained cautious about the prospect of further Federal Reserve rate hikes and renewed fighting between the United States and Iran. 

Oil prices extended their gains as tensions around the Strait of Hormuz threatened energy supplies, while rising bond yields in Japan added to the broader pressure on global markets ahead of key U.S. jobs data.

1. Futures steady as investors await jobs data

U.S. stock futures were little changed early Tuesday after Wall Street fell in the previous session as rising Treasury yields and higher oil prices pressured risk-sensitive assets.

By 03:40 ET, S&P 500 futures, Nasdaq 100 futures and the Dow futures were broadly flat.

Investors are also keeping their positions cautious ahead of Friday’s nonfarm payrolls report, which could provide important clues about the Federal Reserve’s next move on interest rates.

2. Japan’s bond yields hit 30-year high

Japan’s benchmark 10-year government bond yield climbed above 3% on Tuesday for the first time since September 1996, highlighting growing concerns about inflation, government spending and further Bank of Japan rate hikes.

The yield has more than tripled since 2024 as the BOJ has moved away from its long-standing ultra-loose monetary policy.

Rising energy costs linked to the U.S.-Iran conflict have added to Japanese inflation concerns, increasing expectations that the BOJ could raise interest rates again.

For investors, the move matters beyond Japan. Higher Japanese yields can make domestic bonds more attractive to Japanese investors and potentially reduce demand for overseas assets, including U.S. government bonds and stocks.

It is another sign that investors globally are adjusting to a world of higher interest rates after years of ultra-cheap money.

3. Oil climbs as Trump threatens more Iran strikes

Oil prices extended their gains on Tuesday as President Donald Trump threatened further military action against Iran, raising concerns about prolonged disruption to energy supplies through the Strait of Hormuz.

By 01:02 ET, Brent crude futures rose 1.1% to $91.51 a barrel, while WTI futures gained 1.4% to $86.99. Both contracts had jumped nearly 3% in the previous session.

The latest escalation follows U.S. strikes on Iranian military targets on Larak Island and Iran’s subsequent missile attacks on U.S. military facilities in Jordan.

For retail investors, higher oil prices create a difficult backdrop. More expensive crude can raise gasoline, transportation and production costs, pushing inflation higher. That could make it harder for the Fed to lower interest rates and put additional pressure on stocks.

4. Hormuz shipping risks remain elevated

The Strait of Hormuz remains at the center of investor concerns as the U.S.-Iran conflict threatens one of the world’s most important energy shipping routes.

The waterway carries large volumes of crude oil and petroleum products from major Middle Eastern producers. Any sustained disruption could therefore tighten global supplies and push prices significantly higher.

The risks to commercial shipping were highlighted on Monday when a tanker was struck by three unidentified projectiles while exiting the strait, according to the United Kingdom Maritime Trade Operations agency.

President Trump has threatened further strikes against Iran following the latest escalation, raising concerns that the conflict could intensify further.

For investors, the Strait of Hormuz is effectively the link between the geopolitical conflict and the global economy. If shipping is disrupted for an extended period, higher energy prices could feed into inflation, corporate costs and consumer spending.

5. U.S. data, Fed officials in focus

Investors will get several economic signals on Tuesday as they try to assess whether the Federal Reserve could raise rates again.

The July JOLTS job openings report is due later in the day, along with the ISM manufacturing index. Fed Governor Michael Barr is also scheduled to speak.

The data will be closely watched after Fed Chair Kevin Warsh recently adopted a hawkish tone, pushing markets to price in greater odds of a September rate hike.

JOLTS will provide another look at the health of the U.S. labor market, while the ISM report will show whether manufacturing activity is strengthening or weakening.