Stock market futures posted solid gains Tuesday morning as investors reacted positively to news suggesting the Middle East conflict involving Iran could be winding down, offering hope after a turbulent month that has pushed major market indexes toward their sharpest monthly losses in recent years.
According to a Monday report in The Wall Street Journal, President Donald Trump informed his staff that he would consider halting military operations against Iran, even if shipping lanes in the Strait of Hormuz continue to face restrictions.
This development helped calm investor anxiety following weeks of conflict that have hammered global financial markets, leaving both the S&P 500 and Dow Jones Industrial Average heading for their steepest monthly declines since September 2022.
Oil markets remained unstable Tuesday but were still positioned for record monthly increases. The energy sector of the S&P 500 has climbed more than 11% during March, making it the sole sector expected to finish the month with gains.
Both the Dow and Nasdaq concluded last week trading 10% beneath their all-time highs, officially entering correction territory. The smaller Russell 2000 index had already reached correction status earlier in March.
BNP Paribas economist Isabella Mateos Y Lago noted that investors don’t anticipate the conflict will significantly harm economic growth, with most analysts maintaining their pre-conflict projections for U.S. market performance through late 2026 and making minimal adjustments to profit expectations, as cash reserves stayed below levels seen during Trump’s tariff announcements.
“As long as the possibility of scenarios that inflict only manageable growth costs persists, it is preferable that financial markets do not amplify headwinds from higher energy prices and more hawkish central banks,” she stated.
By 5:08 a.m. Eastern Time, Dow futures had climbed 417 points or 0.92%, while S&P 500 futures advanced 57 points or 0.89%, and Nasdaq 100 futures increased 194.25 points or 0.84%.
Market watchers will be monitoring the February Job Openings and Labor Turnover Survey (JOLTS), which kicks off a series of employment reports during this shortened holiday week.
Statements from Federal Reserve officials, including Austan Goolsbee and Michelle Bowman, will be closely examined for insights into the central bank’s future monetary policy direction, particularly after Fed Chair Jerome Powell indicated Monday that the Fed could take time to evaluate the conflict’s economic impact.
Rising oil prices due to the Iran situation have reignited concerns about inflation, leading money market traders to eliminate expectations for any Fed rate cuts this year, a shift from the two reductions they had anticipated before the conflict began, according to CME Group’s FedWatch Tool.
In pre-market trading activity, McCormick shares rose 4.2% following Unilever’s announcement of advanced discussions to merge its food operations with the spice company.
Emerson Electric gained 2.2% after Jefferies initiated coverage with a “buy” recommendation.
