U.S. stock futures moved higher Sunday night amid reports of progress in negotiations aimed at resolving the Middle East conflict, and a related sharp decline in oil prices. S&P 500 futures climbed 0.8% to 7,547.0 points, Nasdaq 100 futures surged 1.3% to 29,940.75 points by 21:44 ET (01:44 GMT), and Dow Jones futures traded 0.6% higher at 50,974.0 points.
U.S. markets will be closed on Monday for a public holiday, pausing what has been a volatile stretch driven by rising borrowing costs and geopolitical uncertainty.
Investor sentiment improved after President Donald Trump said Washington and Tehran had "largely negotiated" a framework agreement intended to reopen the Strait of Hormuz, the strategic shipping channel that handles roughly a fifth of the world’s oil flows. That comment sparked hopes that the most severe supply-disruption scenarios could be avoided.
At the same time, Mr. Trump tempered expectations, making clear that the United States would retain a naval blockade until any agreement was formally signed and certified. "There is no rush," he said on Sunday, pointing to remaining differences between the parties over Iran’s uranium stockpile, sanctions relief and regional security arrangements.
The market reaction was swift in energy markets. Brent crude tumbled more than 4%, falling below $100 a barrel as traders recalibrated the risk premium tied to potential interruptions in oil flows. The drop in crude also weighed on the dollar and on Treasury yields, prompting a rotation back into equities after a week in which investors had been focused on the implications of higher borrowing costs for corporate and economic prospects.
The futures gains echoed a strong finish on Wall Street last week. The Dow Jones Industrial Average closed at a record high, the benchmark S&P 500 rose 0.4% to extend its winning streak to eight consecutive weeks, and the Nasdaq Composite added 0.2% to finish close to record territory.
Analysts said markets are likely to remain highly sensitive to developments around the Iran talks and the status of the Strait of Hormuz. Any official confirmation that the waterway is reopening could further lift risk assets globally, while renewed setbacks or evidence of continued damage to regional energy infrastructure could keep volatility elevated.
For now, market participants are parsing each headline for signs that geopolitical disruptions to oil supplies will ease - and watching for confirmation that any agreement has been formalized and certified. In the interim, the drop in oil prices and retreat in Treasury yields provided a supportive backdrop for equities as traders digested the latest diplomatic developments.