U.S. stock futures edged higher Monday, rallying after the selloff at the end of last week, although any gains are likely to be limited by news of escalating tensions in the Middle East.

By 04:10 ET (08:10 GMT), the Dow futures contract was 155 points, or 0.4%, higher, S&P 500 futures climbed 28 points, or 0.6%, and Nasdaq 100 futures rose by 105 points, or 0.6%.

The main indices closed sharply lower on Friday, with the Dow Jones Industrial Average dropping almost 500 points, or 1.2%, the S&P 500 falling 1.5%, its worst day since January, and the Nasdaq Composite dropping 1.6%.

The losses resulted in the DJIA shedding 2.4% last week, its worst week since March 2023, the S&P 500 sliding 1.5%, its worst week since October 2023, while the Nasdaq Composite Index dropped 0.5%, its third negative week in a row. 

Investors will be digesting the raised tensions in the Middle East after Iran launched drones and missiles on Israel on Saturday night, although risk has been capped after U.S. President Joe Biden told Israeli Prime Minister Benjamin Netanyahu that the U.S. will not take part in a counter-offensive against Iran.

Elsewhere, the quarterly earnings season continues, with results from Goldman Sachs [see above] the highlight, while March retail sales will be the main economic data release.