US stock futures are trading sharply lower this morning, with S&P 500 Index futures down 1.4% as of 7:35 a.m. in New York. The decline comes as the war in Iran enters its fourth day, triggering heightened concerns about prolonged disruption to energy markets and a potential surge in inflation.

Traders are particularly focused on how extended conflict could impact oil supplies, with Iran being a major producer. The market's negative reaction reflects growing anxiety about stagflation risks - where economic growth slows while prices continue rising. Energy stocks are seeing increased volatility as investors weigh the potential for sustained higher oil prices.

The futures decline signals a risk-off sentiment across Wall Street, with investors likely to seek safe-haven assets. Market participants are closely monitoring developments in the Middle East, as any escalation could further pressure equity markets and potentially force central banks to reconsider their monetary policy stance.