US stock index futures fell sharply on Monday as a sell-off in technology shares and renewed uncertainty over a potential US-Iran nuclear agreement unsettled investors heading into the trading week.

Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all pointed lower before the opening bell. The technology sector led the declines, with heavy-weight tech names pulling index futures down across the board.

What Is Driving the Sell-Off

Two forces are hitting sentiment at the same time. First, technology stocks, which have driven much of the market's gains over the past year, are under renewed pressure. When large-cap tech names slide, they drag the broader indexes with them because of their outsized weight in the S&P 500 and Nasdaq.

Second, diplomatic talks between the United States and Iran appear to be stalling. A potential nuclear deal had been seen by markets as a path to easing geopolitical tension in the Middle East and possibly bringing more Iranian oil supply to global markets. Any breakdown in those talks removes that optimism and reintroduces a risk premium into energy prices and global equities.

These two pressures arriving together amplify the negative effect on futures. Technology weakness reflects sector-specific concerns about valuations and earnings expectations, while the Iran uncertainty adds a macro-level risk that is harder for investors to price or hedge.

Why It Matters for Markets and Investors

The Nasdaq is the most exposed index when technology stocks fall because tech companies make up a large share of its total value. A sustained sell-off in that sector can quickly erase weeks of gains, and futures markets suggest the day could open in the red across all three major indexes.

The Iran dimension matters for a different reason. Oil markets are sensitive to any signal about Middle East stability. If US-Iran talks collapse, the risk of conflict or further sanctions enforcement rises, which tends to push oil prices higher. Higher energy costs feed into inflation expectations, which in turn puts pressure on interest rate forecasts and complicates the Federal Reserve's policy path.

For equity investors, the combination of rich valuations in technology and geopolitical uncertainty is a difficult backdrop. Risk appetite tends to shrink when both factors are moving in the wrong direction simultaneously.

Broader economic data and Federal Reserve commentary remain in focus for the week ahead. Any signals from Fed officials about the pace of rate cuts, or the absence of them, will interact with these pre-market moves to set the tone for trading sessions through the week.

Investors will be watching whether technology names stabilize once regular trading begins, or whether the futures sell-off translates into sustained selling pressure through the session. The Iran situation is harder to forecast on a single-day basis, as diplomatic developments can shift quickly and without warning.

In the near term, the market is in a position where any fresh negative headline, whether on tech earnings expectations or Middle Eastern diplomacy, is likely to find a skittish audience. Conversely, a positive signal from either front could support a quick reversal, given that underlying economic data in the US has remained relatively firm.