The Dow futures pulled back in early Monday trading, pressured by a sharp rise in Treasury bond yields, which surged to their highest levels in two months. Escalating tensions in the Middle East added further uncertainty, contributing to a cautious market sentiment and an increase in oil prices.

Investors are now speculating whether the Federal Reserve will cut interest rates ahead of the upcoming elections, a decision complicated by two key factors: the declining unemployment rate and an inflation report expected later this week.

The CME Group's FedWatch tool, which measures market expectations for Fed fund rate changes, shows that traders are now pricing in a 91% chance of a quarter-percentage-point rate cut at the Federal Reserve's next meeting in November.

In premarket trading, the Dow futures dropped 156 points or 0.37%. Tech-heavy Nasdaq futures shed 0.4%, while the S&P 500 futures dipped 0.3%. Meanwhile, the 10-year Treasury yield, a benchmark for mortgages and car loans, rose above 4% on Monday, reaching its highest level since early August. The 2-year notes also rose five basis points to the 4% level.

Oil prices continued to surge, taking the international benchmark Brent crude futures closer to $80 per barrel, while the U.S. West Texas Intermediate futures were over $73, following another round of attacks by Israel on terrorist targets in Lebanon.