U.S. stock index futures climbed strongly Monday night, erasing earlier declines after a report indicated President Donald Trump is considering stepping back from military operations against Iran without a prior reopening of the Strait of Hormuz.
By 21:43 ET (01:43 GMT), S&P 500 Futures were up 0.9% at 6,446.75 points. Nasdaq 100 Futures had risen 1% to 23,364.0 points, and Dow Jones Futures were higher by 1% at 45,902.0 points. The gains in futures came after a mostly negative regular session on Wall Street, during which fresh threats from the president toward Iran coincided with continued downward pressure on technology shares.
Report on U.S. stance
The president told aides he would be willing to end hostilities with Iran even if U.S. forces did not succeed in reopening the Strait of Hormuz, according to the report. Administration officials cited in that account said Mr. Trump and his team judged that an operation to reopen the strait would likely prolong a conflict beyond their original four-to-six week timeframe. As a result, the president reportedly decided the U.S. should concentrate on degrading Iran's naval and missile capabilities and then wind down active military engagement.
Under that approach, Washington would intensify diplomatic pressure on Tehran to reopen the strait and would likely urge European and Gulf partners to take the lead in any efforts to secure the waterway. The report noted that a U.S. cessation of military action could help prompt wider deescalation, given Tehran's repeated calls for hostilities to stop before direct negotiations begin.
Why the Strait of Hormuz matters
The Strait of Hormuz has been a central flashpoint in the conflict because the passage accounts for roughly 20% of global oil consumption. Over the past month, global crude and natural gas prices climbed sharply as Iran effectively blocked the route. News that the U.S. might wind down military operations, even if the strait remained closed, appeared to moderate some of the upward pressure on energy prices, though oil remained elevated relative to earlier levels.
Wall Street's session
Equity benchmarks finished the regular session broadly weaker as investors remained sensitive to developments in the Middle East and to sector-specific headwinds. The S&P 500 fell 0.4% to 6,343.72 points. The NASDAQ Composite declined 0.7% to 20,794.64 points, reflecting continued struggles in technology names amid concerns about artificial intelligence enthusiasm and softer-than-expected chip demand. The Dow Jones Industrial Average edged up 0.1% to 45,216.14 points.
Hostilities in the region showed little sign of abating during the day. Iran launched attacks on targets in Israel and other Gulf states, and Yemen's Houthi forces carried out strikes against Israel over the weekend, a development that could broaden the geographic scope of the conflict. Iran largely dismissed ceasefire proposals, labeling U.S. calls for a halt to fighting as unrealistic.
Oil prices continued to trend higher on the prospect of prolonged Middle East tensions, though some of the recent gains were pared following the report about a potential U.S. deescalation plan that would not hinge on Hormuz reopening.
Bottom line
Markets reversed earlier losses as reports emerged that the U.S. may seek to end military action against Iran without forcing an immediate reopening of the Strait of Hormuz, lifting equity futures and trimming some energy price gains. The underlying session highlighted persistent fragility in technology stocks and ongoing volatility in oil markets tied to developments in the Middle East.