U.S. stock index futures tied to the Dow Jones, S&P 500, and Nasdaq are signaling a positive start on Tuesday, as investors respond favorably to developments in the Middle East and remain hopeful for continued gains after Monday’s rally.
Market sentiment received a notable boost after former President Donald Trump announced that a truce between Israel and Iran had been established.
“On the assumption that everything works as it should, which it will, I would like to congratulate both countries, Israel and Iran, on having the stamina, courage, and intelligence to end what should be called ‘THE 12-DAY WAR,’” Trump wrote on Truth Social.
Despite claims from Israeli officials accusing Iran of not fully honoring the ceasefire, traders appear encouraged by the potential for a cooling of tensions in the region.
The upbeat tone in the futures market also held steady after Federal Reserve Chair Jerome Powell reiterated the Fed’s patient stance on monetary policy, resisting calls—particularly from Trump—for an immediate rate cut.
“For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” Powell stated during his address to lawmakers on the House Financial Services Committee.
Stocks finished firmly in the green on Monday, as investors shrugged off initial uncertainty. The Dow Jones Industrial Average surged 374.96 points, or 0.9%, closing at 42,581.78. The Nasdaq Composite climbed 183.56 points, also up 0.9%, to end at 19,630.97, while the S&P 500 gained 57.33 points, rising 1.0% to 6,025.17.
Markets spent most of the earlier session fluctuating near the flatline as investors monitored potential fallout from recent U.S. strikes on Iranian nuclear sites. Tensions briefly reignited after reports surfaced that Iran might shut down the Strait of Hormuz and that a U.S. military installation in Qatar had come under attack.
However, equities rebounded strongly in the final hour of trading, following comments from Fed Vice Chair Michelle Bowman, who expressed openness to easing interest rates in July if labor market weakness persists and inflation expectations continue to soften.
Investors were further reassured by speculation that tariff reductions in ongoing U.S.-China trade talks may be on the table, helping to counterbalance earlier geopolitical concerns.
In housing market news, the National Association of Realtors reported that existing home sales increased by 0.8% in May, accompanied by a 6.2% rise in available inventory. However, on a year-over-year basis, sales were down 0.7%.
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