By Shashwat Chauhan and Shristi Achar A

(Reuters) -U.S. stock index futures rose on Monday after Wall Street witnessed a bruising sell-off in the previous session on the back of disappointing earnings from some big U.S. banks, while escalating tensions in the Middle East made investors wary.

All three major indexes fell more than 1% on Friday, registering weekly losses.

President Joe Biden warned Israeli Prime Minister Benjamin Netanyahu the United States would not participate in a counter-offensive against Iran - an option Netanyahu's war cabinet favors after a mass drone and missile attack on Israeli territory - according to officials familiar with the development.

Iran launched the attack after a suspected Israeli strike on its embassy compound in Syria on April 1 that killed top Revolutionary Guards commanders. However, Iran's attack, launched using more than 300 missiles and drones, caused only modest damage in Israel.

"The involvement on Iran has raised the geopolitical risk premium, and we expect markets to trade with a dose of caution over the coming days," Mohit Kumar, chief economist Europe at Jefferies, said in a note.

"However, beyond the near term uncertainty, we are still in buy the dip camp for risky assets and range bound environment for rates."

Defense stocks like (NYSE:), General Dynamics (NYSE:) and RTX Corp gained between 1% and 1.8% in premarket trading.

With the first-quarter earnings season now in full swing, investors will look for numbers from brokerage (NYSE:) and lender Goldman Sachs before the opening bell.

Also on the docket are comments from Dallas Federal Reserve President Lorie Logan later in the day. Fed Chair Jerome Powell is scheduled to speak on Tuesday.

On the data front, a retail sales reading for March, due at 8:30 a.m. ET, could be key in gauging how the U.S. consumer is faring in the current high-interest-rate environment.

U.S. equities have sold off recently as investors sharply readjusted their expectations of how much the Fed would cut rates this year. Traders have priced in only 42 basis points of cuts this year, according to LSEG data, down from about 150 bps at the start of the year.

Money market participants now see an about 50% chance of the central bank kicking off its easing cycle in July, according to the CME FedWatch Tool.

At 6:50 a.m. ET, were up 106 points, or 0.28%, were up 23.5 points, or 0.45%, and were up 103 points, or 0.57%.

Most megacap growth stocks edged higher in premarket trading. However, Apple (NASDAQ:) fell 1.2% after data from research firm IDC showed the company's smartphone shipments dropped about 10% in the first quarter of 2024.

Tesla (NASDAQ:) pared premarket losses, last down 0.7%, after a report said the electric vehicle maker will lay off more than 10% of its global workforce.

Salesforce (NYSE:) dipped 2.5% after Reuters reported, citing a source, that the customer relations software maker was in advanced talks to acquire Informatica.