Stock market futures showed gains Monday morning as Wall Street responded to encouraging signs that Middle East hostilities could be winding down, following the strongest weekly performance for major indexes in four months.
Both the United States and Iran have been presented with a framework proposal aimed at ending the ongoing conflict, coming just one day after President Donald Trump issued stark warnings to Tehran, threatening to unleash “hell” if no agreement was reached. Iranian officials indicated the Strait of Hormuz would remain closed during any temporary truce.
Market participants found encouragement in reporting from Axios, which cited four knowledgeable sources indicating that American officials, Iranian representatives, and regional mediators are actively negotiating terms for a possible 45-day pause in fighting.
Energy sector stocks declined in pre-market activity as oil prices softened Monday. Exxon Mobil dropped 1.3%, while Chevron decreased 1% and Occidental Petroleum fell 1.7%.
Major market indexes closed with mixed results Thursday but managed to secure their first positive weekly showing in six weeks as hopes for conflict resolution provided market relief.
The conflict has now stretched into its second month after delivering significant blows to global financial markets throughout March. Both the S&P 500 and Nasdaq experienced their steepest monthly declines since 2022, while the Dow, Nasdaq, and Russell 2000 all entered correction territory by dropping 10% from their peak levels.
Market activity was anticipated to be lighter than usual Monday due to holiday closures across European and Asian markets.
As of 4:50 a.m. Eastern Time, Dow E-mini futures had advanced 73 points or 0.16%, S&P 500 E-minis gained 24.25 points or 0.37%, and Nasdaq 100 E-minis rose 159.25 points or 0.66%.
This week, market watchers will closely examine domestic inflation statistics to determine whether elevated energy costs resulting from the Iranian conflict have begun affecting the broader economy.
These upcoming reports will follow Friday’s employment data revealing that U.S. job creation exceeded expectations in March, marking the largest monthly increase in nonfarm payrolls in 15 months.
Money market traders are no longer anticipating any Federal Reserve rate reductions this year, a significant shift from the two cuts they had projected before the conflict began, according to CME Group’s FedWatch Tool.
In individual stock movement, Soleno Therapeutics shares jumped more than 30% following a Financial Times report Sunday indicating Neurocrine Biosciences was close to acquiring the rare genetics pharmaceutical company for over $2.5 billion.
