U.S. stock futures jumped in today’s trading, supported by a clear improvement in risk appetite after signs of progress in talks aimed at ending the conflict in the Middle East. This was reflected directly in oil prices, which fell sharply. Despite the positive tone, markets remained relatively cautious after U.S. President Donald Trump confirmed that there was no rush to finalize a deal with Iran.
S&P 500 futures rose 0.8% to 7,547 points, while Nasdaq 100 futures advanced 1.3% to 29,940.75 points. Dow Jones futures also gained 0.6% to 50,974 points. These moves came ahead of the closure of U.S. markets on Monday for a public holiday.
Investor sentiment improved after Trump indicated that Washington and Tehran had made significant progress in negotiating a framework agreement that could allow the reopening of a vital shipping route that carries around one fifth of global oil flows. However, the positive tone was not complete, as Trump later confirmed that the U.S. naval blockade would remain in place until a formal agreement is signed and certified.
In the energy market, oil prices fell sharply as traders reduced bets on a severe supply shock scenario. Brent crude dropped more than 4% to below 100 dollars per barrel. This decline also pressured the U.S. dollar and Treasury yields, sending part of the liquidity back into equities after a volatile week dominated by concerns over rising borrowing costs and geopolitical uncertainty.
Oil prices also fell by around 6%, with Brent crude dropping to 97.69 dollars per barrel and West Texas Intermediate falling to 90.85 dollars. Markets repriced the geopolitical risk premium amid growing optimism that the United States and Iran are moving closer to an agreement that could pave the way for reopening the Strait of Hormuz. Still, ongoing disagreements between both sides and Trump’s comments about not rushing into a deal kept caution in place, especially as restoring normal oil flows through the strait could take several months while damaged facilities are repaired.
Gold prices rose strongly, supported by a clear decline in the U.S. dollar and Treasury yields, along with stronger investor appetite for precious metals as signs emerged of progress toward a possible agreement between the United States and Iran. Markets are now waiting for Tehran’s response to a framework deal that could include extending the ceasefire and reopening the Strait of Hormuz.
The rise in U.S. futures also extended last week’s strong performance on Wall Street, after the Dow Jones Industrial Average closed at a record high, the S&P 500 continued its gains for the eighth consecutive week, and the Nasdaq Composite ended near record levels.
As for the U.S. dollar, it declined after growing hopes for an agreement that could reopen the Strait of Hormuz, easing part of the concerns around energy supplies and geopolitical tensions. The dollar came under pressure as the euro, the British pound, and commodity linked currencies such as the Australian and New Zealand dollars gained ground. However, optimism remained cautious after Trump confirmed that the U.S. blockade on Iranian ships would continue until a formal agreement is signed. Any real progress on the Hormuz file could continue to support high risk assets and pressure the dollar, while any setback in negotiations may quickly revive demand for the U.S. currency as a safe haven.
Still, markets remain directly tied to developments in the Iran file and the status of the Strait of Hormuz. Any official confirmation of the strait’s reopening could give high risk assets an additional boost, while stalled talks or continued damage to energy infrastructure could quickly bring volatility back, even if the broader agreement scenario remains on the table.
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