Wall Street set for higher open as easing U.S.-Iran tensions boost sentiment: Dow Jones, S&P, Nasdaq, Futures

U.S. stock futures pointed to a stronger start on Monday as investors welcomed signs of easing tensions between the United States and Iran, helping improve risk appetite ahead of a busy week for markets.

Optimism increased after reports that President Donald Trump had paused nearly two weeks of military operations against Iran to allow additional time for diplomatic negotiations.

“He’s giving talks some space, he’s giving it a little bit of room,” U.S. ambassador to the United Nations Mike Waltz told Fox News on Sunday.

Iran subsequently halted its retaliatory attacks and said discussions with Oman over the management of the Strait of Hormuz had made progress, raising hopes that one of the world’s most important oil shipping routes could avoid further disruption.

Oil prices and bond yields retreat

The prospect of renewed diplomacy triggered a sharp decline in crude oil prices, with U.S. crude futures falling more than 6%.

Treasury yields also moved lower alongside oil prices, easing concerns about inflation and interest rates ahead of this week’s Federal Reserve policy meeting.

“Sentiment has received a further boost from a sizzling stock market debut in China by silicon chip maker CXMT,” said AJ Bell investment director Russ Mould.

He added, “Its near five-fold surge may help to soothe concerns about the AI trade after slumps in SpaceX and Korea’s SK Hynix after their recent offerings.”

Markets ended last week on a mixed note

Friday’s trading session was marked by significant volatility after Thursday’s sell-off.

Stocks rallied early in the day before surrendering much of those gains during afternoon trading. By the close, the Nasdaq had fallen 161.87 points, or 0.6%, to 24,975.82. The S&P 500 edged up 3.68 points, or 0.1%, to 7,411.98, while the Dow Jones Industrial Average added 235.60 points, or 0.5%, to finish at 51,947.25.

For the week, the Nasdaq lost 2.1%, ending below the 25,000 mark for the first time since late April. The S&P 500 declined 0.6%, while the Dow slipped 0.4%.

Tariff concerns limited gains

The initial rally on Friday was supported by lower oil prices after Reuters reported that Pakistan was exploring ways to help restart U.S.-Iran negotiations.

However, crude prices remained well above the lows seen earlier this month as military tensions continued despite diplomatic efforts.

Following the United States’ 13th consecutive night of strikes against Iranian targets, Tehran responded with missile attacks aimed at neighbouring countries hosting U.S. military bases.

Investor sentiment later weakened after President Donald Trump threatened significant tariffs on the European Union in response to fines imposed on major U.S. technology companies.

The administration also confirmed tariffs ranging from 10% to 12.5% on imports from 60 economies, including the European Union, the United Kingdom, China, India, Japan and Canada. The new measures replace the temporary 10% global tariff that expired on Monday.

Sector performance reflected changing market expectations

Technology stocks remained under pressure, with the Philadelphia Semiconductor Index tumbling 4.3%.

Intel (NASDAQ:INTC) led semiconductor losses, falling 7.9% despite reporting second-quarter earnings that beat expectations and issuing an optimistic outlook for the third quarter. Computer hardware and networking companies also weighed on the Nasdaq.

In contrast, airline stocks rallied as lower oil prices improved profit expectations, lifting the NYSE Arca Airline Index by 3.2%.

Oil service companies also outperformed, with the Philadelphia Oil Service Index climbing 2.9%. SLB (NYSE:SLB) surged 11% after delivering stronger-than-expected second-quarter results.

Commercial real estate and homebuilding stocks also attracted buyers as falling Treasury yields eased concerns over borrowing costs.

Intel stock price

SLB stock price