U.S. stock futures rose on Monday, rebounding from last week’s sell-off following strong Goldman Sachs earnings, retail data and hopes that the conflict in the Middle East won’t further escalate.

Futures tied to the Dow Jones Industrial Average climbed 318 points, or 0.8%. S&P 500 and Nasdaq-100 futures each around 0.7% and 0.8%, respectively.

Iran launched drones and missiles on Israel on Saturday night, marking the first direct attack on Israel from Iranian territory. While the majority of the threats were intercepted, concerns of retaliation remain. 

Gold futures advanced slightly to trade at $2,376.30 an ounce. Bullion hit a record level last week and is up around 15% this year as investors seek safety from sticky inflation and geopolitical tensions.

But oil prices fell despite rising in the last few weeks prior to the attack amid growing Middle East tensions. That, along with the potential for Israel’s response to be measured given the country thwarted the attack, offered positive signs for traders.

“Historically, geopolitical shocks cause short-term volatility, not long-term market declines,” said Emily Bowersock Hill, CEO of Bowersock Capital Partners. “In this current environment, however, the risk of an extended period of volatility is higher, given the inflationary oil price shocks that may emanate from the heightened tensions in the Middle East.”

How Israel Prime Minister Benjamin Netanyahu will respond to the attack is a key outstanding question, said Krishna Guha, Evercore ISI senior managing director, in a Sunday note. The Biden administration has made it clear it does not want Israel to retaliate, he noted. 

“Provided that Netanyahu looks like he is willing to follow U.S. advice, there may be some element of a relief rally in markets Monday,” Guha said. “However, our colleagues in the energy team do not expect a big retracement in the price of oil.”

Goldman Sachs popped more than 3% in premarket trading after beating Wall Street expectations on both lines in the first quarter. That follows several bank reports on Friday, with investors sending JPMorgan shares 6% lower amid concerns about what the financial giant may generate from lending in the year ahead.

Stock futures took a leg up following the latest economic data. Retail sales increased 0.7% for the month of March, providing the latest indication that consumption remains strong in spite of inflationary pressures. That pace was higher than the 0.3% consensus forecast of economists polled by Dow Jones.

Monday’s premarket action also comes of the heels of a tough week on Wall Street, as lingering inflation concerns and a poor start to the new corporate earnings season weighed on traders.

The Dow fell more than 2%, marking its second down week in a row and biggest lost since March 2023. After posting its largest drop since January on Friday, the S&P 500 ended the week lower by about 1.5% — its worst performance since October 2023.