Dow Futures Surge on Iran Deal Optimism as Oil Prices Sink

CNBC reported Tuesday that U.S. stock futures jumped sharply in early trading as oil prices fell and Iran deal hopes lifted investor sentiment coming off the Memorial Day weekend.

Dow Jones Industrial Average futures climbed roughly 319 points, or about 0.6%. S&P 500 futures gained 0.65%, and Nasdaq-100 futures rose nearly 0.9%. U.S. cash markets were shuttered Monday for the public holiday.

Trump’s Iran Comments Spark Rally

President Donald Trump posted on Truth Social Monday that negotiations with Iran to conclude the ongoing war were “proceeding nicely.” He simultaneously cautioned that a return to military operations remained on the table if diplomacy collapsed. Trump’s framing was direct: a comprehensive agreement or no agreement at all.

Those comments landed hard in commodity markets. West Texas Intermediate futures for July dropped more than 5% in early trading. Brent crude moved in the opposite direction, rising roughly 2%, reflecting differing regional supply assumptions.

A Market Already Building Momentum

The Iran deal hopes arrive after a strong run for U.S. equities. The S&P 500 gained 0.9% last week, extending its longest weekly winning streak since late 2023. The Dow added 2.1%, recording its third weekly advance in four of the past five weeks. The Nasdaq climbed 0.5%, its seventh gain in eight weeks.

Analyst Adam Parker, founder of Trivariate Research, told CNBC that fundamentals deserve at least partial credit for the sustained rally. He noted that earnings projections for this year sit near 23% growth, with 16% growth penciled in for next year, while forward price-to-earnings multiples have actually compressed modestly.

Also Read: South Korea’s Kospi Hits Record as Asian Markets Close Mixed

Fed Rate-Hike Bets Complicate the Picture

Not everything favors bulls. Despite last week’s oil pullback, crude remains well above earlier-year levels and price pressures have not meaningfully eased. That backdrop has nudged traders to reprice Federal Reserve policy in a more hawkish direction. According to CME Group’s FedWatch tool, the probability of a July rate hike climbed to roughly 8.5%, up sharply from under 1% just one month ago. That shift signals markets are no longer treating easier monetary conditions as a near-term certainty.

Also Read: Bank of Japan Deputy Governor Flags Caution on Rate-Hike Timing

Asian Markets Close Mixed Ahead of U.S. Open

Overnight, Asia delivered a split verdict. South Korea’s Kospi surged 2.55%, touching a fresh intraday record above 8,131. Japan’s Nikkei 225 edged 0.25% lower after breaching 65,000 for the first time during Monday’s thin holiday session. China’s CSI 300 added 0.5%, while Australia’s ASX 200 slipped 0.4%.

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