Oil nears $100. Futures turn red.

Markets are back. Oil is knocking on $100, and Wall Street is opening the holiday-shortened week on the defensive.

Brent crude climbed 1.73% to $98.66 after fresh attacks on Saudi energy facilities intensified fears of a wider Middle East conflict. At 6:54 AM ET, Dow futures fell 0.75%, S&P 500 futures lost 0.31% and Nasdaq 100 futures slipped 0.04%.

That oil move lands at an awkward moment. Friday's strong jobs report gave the Federal Reserve room to raise rates, while Thursday's PPI and Friday's CPI will show whether policymakers need to use it.

Growth survived the summer. The inflation test starts now.

The United States entered the week with a growth surprise. It is reopening with an energy shock. Brent crude rose to $98.66, while U.S. crude traded above $93, as attacks on Saudi energy facilities raised the risk of wider disruption across the Gulf.

Oil matters twice. First, it reaches households through gasoline, airfares, shipping and the cost of moving nearly everything. Second, it complicates the Fed's decision just as the labor market has shown renewed strength.

August payrolls rose by 162,000, compared with expectations near 53,000. Unemployment held at 4.1%, and revisions added 55,000 jobs to June and July. The Fed no longer needs to worry that one more rate increase will hit an economy already sliding into contraction.

That shifts the burden to inflation. If PPI and CPI show that energy pressure is spreading into goods or services, policymakers have both a reason and enough economic cover to tighten. If underlying inflation stays contained, the Fed can treat the oil spike as a temporary supply shock.

The market read: $100 Brent is more than a commodity headline. It is the price level that connects geopolitics, consumer spending, bond yields and the next Fed decision.

At 6:54 AM ET, Dow futures were down 403 points, S&P 500 futures were down 24 points and Nasdaq 100 futures were down 11 points. The pressure was concentrated in economically sensitive stocks, while parts of the chip complex resisted the decline.

Energy led the premarket. Occidental Petroleum gained about 1.6% and Marathon Petroleum rose about 1.6%. Intel added about 4.0% and Nvidia edged 0.3% higher. Coinbase fell 1.4% and Strategy lost 2.5% as bitcoin retreated from the $80,000 level.

Risk weakened overseas too. Japan's Nikkei fell 1.7%, South Korea's Kospi lost 0.6%, Hong Kong's Hang Seng declined 0.4% and Germany's DAX slipped 0.3%. Investors are not abandoning risk, but they are demanding a higher price for it.

SPY options entered Tuesday implying a move of roughly 0.40%, or about $3.08 in either direction from Friday's closing level. S&P 500 futures were down about 0.31% at 6:54 AM ET, placing the market close to the lower edge of that expected range before the cash session began.

Futures positioning is more defensive. Non-commercial traders held 246,459 long E-mini S&P 500 contracts and 322,400 shorts as of September 1, leaving them net short 75,941 contracts. Shorts increased by 12,911 during the week, while longs increased by 4,964.

Traders now assign a 60.6% probability to a September rate increase. That keeps the market close to Friday's post-jobs reading of 60.4% and well above the 49.4% probability seen before the payroll report.

That is a meaningful shift, but it is not conviction. The Federal Reserve meets on September 15 and 16, with two major inflation reports still to come before the decision.

Translation: payrolls opened the door to a hike. PPI and CPI decide whether the Fed walks through it.

GameStop reports complete second-quarter results after today's close, but preliminary numbers already show how dramatically the story has changed.

Sales are expected between $780 million and $800 million, down from $972.2 million a year earlier. Operating income is expected between $150 million and $170 million, more than twice last year's $66.4 million.

The headline profit requires more care. Expected net income of $290 million to $310 million includes about $238 million of gains tied to eBay, partly offset by a roughly $75 million loss on digital assets and related receivables.

As of August 1, GameStop held 43.4 million eBay shares worth about $4.95 billion. Investors need to separate retail execution from portfolio performance.

The NFIB Small Business Optimism Index fell 1.1 points to 98.7 in August, cooling from July's highest reading in a year. The index still sits above its 52-year average of 98.0.

Owners reported weaker sales, supply-chain disruption and inflation pressure. Expectations for the wider economy deteriorated, although business owners remained more positive about conditions inside their own companies.

Why it matters: large-company earnings and strong payroll growth say the expansion is intact. Small businesses are sending a more cautious signal about demand and costs. That gap can widen quickly if oil remains elevated.