Dow, S&P 500, Nasdaq futures surge amid oil price decline

Stock futures jumped on Tuesday as oil prices declined sharply and hopes increased that a resolution to the U.S.-Iran war could be within reach, News.Az reports, citing CNBC.

Dow Jones Industrial Average futures rose 225 points, or 0.5%. S&P 500 futures gained 0.6%, while Nasdaq-100 futures advanced 1%.

U.S. stock markets were closed on Monday due to the Memorial Day holiday.

President Donald Trump said on Monday that talks with Iran aimed at ending the war were “proceeding nicely.” However, he also warned that the United States could go on the offensive if negotiations fail.

Following Trump’s remarks, U.S. crude prices fell sharply. West Texas Intermediate futures for July were last down more than 4%.

Last week, the S&P 500 climbed 0.9%, recording its longest weekly winning streak since late 2023. The Dow rose 2.1%, marking its third weekly gain in four weeks. The Nasdaq increased 0.5%, extending its gains to seven of the past eight weeks.

“There is no doubt that fundamentals are at least partially responsible for the market rally,” wrote Adam Parker, founder of Trivariate Research. “With earnings projected to grow 23% this year, and 16% next year, there’s a credible argument to make that despite the increasing projections for earnings, and strong earnings growth, the price-to-forward earnings has been modestly contracting.”

A decline in oil prices also supported equities last week. U.S. crude dropped 8.4%, marking its worst weekly performance since April 17.

However, with crude still trading well above earlier-year levels and price pressures remaining elevated, investor expectations for easier Federal Reserve policy have been tempered. Traders are now pricing in an 8.5% chance of a rate hike in July, up from 0.9% a month ago, according to the CME Group’s FedWatch tool.

News.Az 

By Nijat Babayev