U.S. stock futures are pointing to a strong opening on Tuesday, indicating that equities could rebound early in the session after reversing course during the previous day’s trading.
Initial buying interest may stem from reports suggesting President Donald Trump is considering bringing the Middle East conflict to a close.
The Wall Street Journal reported that Trump told advisers he would be willing to halt the U.S. military campaign against Iran even if the Strait of Hormuz remains mostly closed.
According to administration officials cited by the WSJ, Trump and his team believe that a military effort to reopen the strait could extend the conflict beyond the president’s preferred four-to-six-week timeframe.
The officials told the newspaper that the U.S. would instead attempt to pressure Tehran through diplomatic channels to restore shipping through the waterway. If that approach fails, Washington could encourage regional allies to take the lead.
Trump appeared to echo the report in a Truth Social post Tuesday morning urging allies to “build up some delayed courage, go to the Strait, and just TAKE IT.”
“You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us,” Trump said. “Iran has been, essentially, decimated. The hard part is done. Go get your own oil!”
During Monday’s session, stocks initially surged but gradually lost momentum as trading progressed. Major indices pulled back from their intraday highs, with both the Nasdaq and the S&P 500 closing in negative territory.
The Nasdaq dropped 153.72 points, or 0.7%, to end at 20,794.64, while the S&P 500 declined 25.13 points, or 0.4%, finishing at 6,343.72. Both indices recorded their lowest closing levels in nearly eight months.
The Dow Jones Industrial Average bucked the trend, edging up 49.50 points, or 0.1%, to 45,216.14 after briefly dipping into negative territory late in the session.
Part of the early strength on Monday was driven by bargain hunting, as investors sought to buy stocks following recent declines.
Optimistic remarks from President Trump regarding the Middle East situation also helped spark early buying.
In a Truth Social post, Trump said the United States had made “great progress” in talks with a “new, and more reasonable, regime” aimed at ending military operations in Iran.
He also warned that if negotiations fail, the U.S. would “conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!)”
However, investor sentiment weakened later in the session as oil prices continued climbing amid ongoing concerns about the conflict’s impact on global energy supply.
U.S. crude oil futures jumped more than 3% on the day, closing above $100 per barrel for the first time since July 2022.
Semiconductor stocks led the declines, pushing the Philadelphia Semiconductor Index down 4.2% to its lowest closing level in nearly three months.
Computer hardware and networking stocks also suffered notable losses, weighing heavily on the tech-focused Nasdaq.
Despite the rally in oil prices, oil services companies also declined, with the Philadelphia Oil Service Index falling 3.3%.
Airline stocks were another area of weakness, while biotechnology and pharmaceutical companies posted solid gains.
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