Dow Jones and Nasdaq tipped for strong start, oil tumbles as Iran tensions ease

Wall Street stocks are predicted to open sharply higher on Monday as a pause in US and Iranian attacks sent oil prices tumbling ahead of a massive week for markets, including a Federal Reserve meeting and earnings from several tech megacaps.

Dow Jones futures were up 568 points, or 1.1%, while those for the S&P 500 gained 0.9% and Nasdaq futures jumped 1.5%.

This follows a volatile week that ended on a mixed note, with the Dow and the S&P finishing slightly higher but losing ground over the five days of trading, while the Nasdaq continued a decline that saw it retreat around 2% from the previous Friday.

At the start of this new week, it has been oil prices on a tear downwards, with West Texas Intermediate crude tumbling 6.3% to $83.66 a barrel, taking its decline since last Thursday to around 10%.

Neither Washington nor Tehran has officially acknowledged a ceasefire, although Iran has said it will refrain from further military action for as long as the US does.

Iran’s foreign ministry also confirmed discussions with Oman aimed at establishing arrangements for shipping through the Strait of Hormuz, although it denied holding direct negotiations with Washington.

Houthi attacks around the Bab al-Mandeb Strait remain a threat to shipping.

Attention now turns to what Barclays called macro’s “Super Bowl” week, with the Fed’s latest pronouncement on Wednesday, with markets pricing in a 34% chance of a quarter-point increase.

Earnings will be equally important. Visa, Coca-Cola, Boeing, S&P Global and PayPal report on Tuesday, followed by Microsoft, Meta, Qualcomm and Starbucks on Wednesday. Apple, Amazon, Mastercard and Coinbase are due Thursday, before ExxonMobil, Chevron, AbbVie and Moderna round out the week on Friday.