S&P 500 Eyes Higher Open as Oil Retreats and Iran Deal Hopes Build

Benzinga reported Friday that the S&P 500 open is favored to the upside, with prediction market traders pricing in a 78% probability the benchmark index begins the session in positive territory.

The index closed at 7,445.72 on Thursday, a gain of 0.17%. That marked back-to-back advances for the index after a three-day slide earlier in the week. S&P 500 futures added another 0.39% in early Friday trading.

Oil Retreat Eases Inflation Fears

Crude prices pulled back sharply on Thursday, providing meaningful relief to equity investors. West Texas Intermediate fell nearly 2% to settle at $96.35 per barrel. Brent crude dropped more than 2% to close at $102.58 per barrel.

The decline matters because elevated energy costs had stoked fears of a fresh inflation wave. Lower pump prices reduce cost pressures across the economy and give the Federal Reserve more room to hold rates steady.

Bond Market Volatility Remains in Focus

Treasury yields were a source of anxiety earlier in the week. The 30-year yield briefly surpassed 5.19%, a level not seen since before the 2008 financial crisis. By Thursday’s close it had retreated to 5.09%, offering some reassurance to rate-sensitive equity investors.

The bond market’s gyrations reflect ongoing uncertainty about the fiscal outlook and the Fed’s next move. Any renewed climb in long-end yields could quickly dampen the risk appetite currently supporting stocks.

Iran Negotiations Add a Wild Card

Investor sentiment has been buoyed by growing expectations of a diplomatic resolution to the U.S.-Iran conflict. The prospect of a deal has helped push oil prices lower and reduce the geopolitical risk premium embedded in markets.

However, complications remain. Reuters reported Thursday that Iran’s supreme leader had instructed that enriched uranium stockpiles stay inside the country. That condition could slow or derail final agreement talks, and any breakdown in negotiations would likely send crude prices sharply higher again.

Why the Rally Has Legs

Beyond geopolitics, the broader backdrop for equities remains supportive. The S&P 500 is on pace for its eighth consecutive weekly gain. Strong corporate earnings, persistent enthusiasm around artificial intelligence investment, and a resilient labor market have all underpinned buyer confidence.

The previous day’s prediction market contract, which had implied a higher Thursday open, ultimately resolved in the other direction. The S&P 500 opened Thursday at 7,410.78, below Wednesday’s close of 7,432.97, settling that contract at a loss for bulls.

Friday’s 78% implied probability reflects renewed optimism, but traders have been reminded this week that outcomes can shift quickly.

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