US stock futures were broadly flat in overnight trading on Monday as investors balanced tentative progress toward reopening the Strait of Hormuz with continued uncertainty over whether Washington and Tehran can reach a wider agreement.

Dow Jones Industrial Average futures slipped by 37 points, while S&P 500 futures edged slightly lower. Nasdaq 100 futures were little changed.

Asian markets also showed limited movement. Hang Seng Index futures in Hong Kong moved modestly higher following the index’s previous close at 25,937.49, while futures linked to Australia’s S&P/ASX 200 were largely unchanged. Japanese markets remained closed for a public holiday.

The subdued trading followed a relatively quiet Monday session on Wall Street, where the S&P 500 ended close to unchanged as investors continued to monitor developments in the Middle East.

Attention remains focused on the Strait of Hormuz, one of the world’s most important oil shipping routes. Iran has indicated that discussions with Oman over reopening the waterway are advancing, although Tehran continues to rule out direct talks with the US unless several conditions are addressed.

Iranian Foreign Minister Abbas Araghchi said over the weekend that negotiations could not resume while the US remained in breach of the June memorandum of understanding and until Iran received compensation for those violations, according to the semi-official Tasnim News Agency.

Continued uncertainty around the conflict pushed energy prices sharply higher on Monday. West Texas Intermediate crude settled 5.1% higher at $82.13 per barrel, while Brent crude gained 5% to close at $87.72.

Markets are now preparing for a series of important US inflation releases later this week. July’s Consumer Price Index is scheduled for Wednesday, followed by the Producer Price Index on Thursday.

The data could complicate the Federal Reserve’s policy outlook. Rising oil prices have renewed concerns over inflation at the same time that recent weakness in the US labour market has raised questions about economic momentum and consumer spending.

Last week’s July employment report showed an unexpected decline in nonfarm payrolls, strengthening expectations that the Fed may keep interest rates unchanged for longer. Fed funds futures now imply roughly a 50% probability of a September rate increase, down from around 67% a week earlier, according to CME Group’s FedWatch tool.

The weaker labour market may give policymakers more flexibility to remain cautious on further tightening, particularly if employment conditions continue to soften even as inflation stays elevated.

Corporate earnings will also remain in focus on Tuesday. Cardinal Health and On Holdings are scheduled to report before the opening bell, while Cava Group, CoreWeave and Super Micro Computer are expected to release results later in the day.

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