U.S. equity futures pointed to a positive start for Monday’s session as investors responded favourably to signs of easing geopolitical tensions in the Middle East, helping improve sentiment ahead of several key market events.
Markets reacted after President Donald Trump suspended military operations against Iran following nearly two weeks of strikes, allowing diplomatic efforts to continue.
“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 also confirmed it had halted retaliatory attacks while reporting progress in discussions with Oman over the future management of the Strait of Hormuz, easing fears of further disruption to global oil supplies.
Falling oil prices support investor confidence
Crude oil prices moved sharply lower after the latest diplomatic developments, with U.S. oil futures dropping by more than 6%.
Lower energy prices also pushed Treasury yields lower, reducing concerns over inflation and monetary policy ahead of this week’s Federal Reserve 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.”
Investors look ahead after volatile trading
Friday’s session ended with mixed results after stocks experienced wide swings throughout the day.
The Nasdaq declined 0.6% to 24,975.82, while the S&P 500 edged 0.1% higher to 7,411.98. The Dow Jones Industrial Average added 0.5% to close at 51,947.25.
On a weekly basis, the Nasdaq fell 2.1%, while the S&P 500 and Dow lost 0.6% and 0.4%, respectively.
Tariffs remain a source of uncertainty
Friday’s early gains were fuelled by lower oil prices following reports that Pakistan was exploring ways to revive U.S.-Iran negotiations.
However, market sentiment weakened later in the session after President Donald Trump threatened additional tariffs on the European Union in response to regulatory 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.
Sector performance remains mixed
Semiconductor stocks were among the weakest performers, with Intel (NASDAQ:INTC) falling 7.9% despite reporting stronger-than-expected quarterly results and issuing upbeat guidance.
Airline shares outperformed as lower fuel prices improved the sector’s outlook, while oil services companies also advanced, led by SLB (NYSE:SLB), which jumped 11% after posting earnings above expectations.
Commercial real estate and homebuilding companies also benefited from lower Treasury yields, which eased concerns over financing costs.
Leave a Reply