Source: Sharecast
As of 1300 BST, Dow Jones futures were down 0.59%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.53% and 0.49%, respectively.
The Dow closed 868.71 points higher on Friday, while the S&P 500 and Nasdaq Composite hit all-time highs on the back of a ceasefire agreement between Iran and Lebanon.
Futures traded lower early on Monday after Donald Trump announced that American forces had fired on and taken control of the Iranian ship after Tehran declined to join another round of peace talks in Pakistan.
He said the vessel was under US Treasury sanctions "because of their prior history of illegal activity" and that authorities were assessing its cargo. Trump also warned that the US would target power plants and bridges in Iran if Tehran did not agree to a deal, with the current ceasefire between the two countries due to expire this week.
Trade Nation's David Morrison said: "On Friday afternoon, the stock market rally was given an extra lift after Mr Trump stated that Iran had reopened the Strait of Hormuz. That story, as tenuous as it was, unravelled within a day. Tensions between Washington and Tehran escalated over the weekend following the seizure of an Iranian-flagged cargo ship in the Gulf of Oman. The move followed Iran's decision not to participate in another round of peace talks planned in Pakistan.
"Trump has renewed his threat that the US could target Iranian infrastructure, including power plants and bridges, if a deal is not reached before the ceasefire expires this week. Given all this, it's perhaps surprising that, by mid-morning in Europe, US stock index futures have only given back around half their gains from Friday. This looks like a market which doesn’t want to go down. No doubt US investors feel insulated from anything happening elsewhere in the world."
In the corporate space, Alaska Air will report earnings after the close.
No major data points were scheduled for release on Monday.
Reporting by Iain Gilbert at Sharecast.com