U.S. stock futures were pointing to a weaker start for markets on Tuesday, suggesting equities could retreat after several sessions of gains.
Investor caution comes as markets track developments in the Middle East ahead of an 8 p.m. ET deadline set by U.S. President Donald Trump for Iran to reach an agreement.
Trump warned that the United States could strike Iranian infrastructure—including power plants and bridges—if Tehran fails to secure a deal and reopen the Strait of Hormuz, a vital corridor for global oil shipments.
In a recent post on Truth Social, Trump intensified his rhetoric, writing, “A whole civilization will die tonight, never to be brought back again. I don’t want that to happen, but it probably will.”
The president also suggested that a “different, smarter, and less radicalized” leadership had taken power in Iran, raising the possibility of a dramatic political shift.
“WHO KNOWS?” Trump wrote, adding further uncertainty for financial markets. “We will find out tonight, one of the most important moments in the long and complex history of the World.”
On Monday, stocks moved unevenly throughout the trading session but generally maintained an upward bias, ultimately closing mostly higher and extending the strong rally seen last week.
By the end of the session, the major indices were near their intraday highs. The Nasdaq rose 117.16 points, or 0.5%, to 21,996.34. The S&P 500 advanced 29.14 points, or 0.4%, to 6,611.83, while the Dow Jones Industrial Average gained 165.21 points, or 0.4%, finishing at 46,669.88.
Although the positive momentum from the previous week continued, investors appeared hesitant to take aggressive positions amid uncertainty about the potential escalation of the conflict between the United States and Iran following Trump’s latest threats.
In a strongly worded Truth Social post on Easter Sunday morning, Trump again warned that U.S. forces could target Iranian power plants and bridges if the Strait of Hormuz is not reopened before Tuesday evening’s deadline.
Oil prices initially extended last Thursday’s surge in response to Trump’s remarks but later eased after reports emerged of indirect negotiations between Washington and Tehran aimed at reaching a ceasefire.
Axios reported, citing four U.S., Israeli and regional sources, that the United States, Iran and regional mediators are discussing terms for a possible 45-day ceasefire that could pave the way toward a lasting resolution to the conflict.
Reuters also said that Washington and Tehran are evaluating a potential framework to end the five-week-old conflict, although the report noted that Iran has resisted pressure to quickly reopen the Strait of Hormuz.
According to a source familiar with the discussions, a proposal brokered by Pakistan calls for an immediate ceasefire followed by talks on a broader peace agreement to be finalized within 15 to 20 days.
However, a senior Iranian official told Reuters that Iran would not reopen the Strait of Hormuz as part of a temporary ceasefire and would not accept deadlines or pressure to reach a deal.
Meanwhile, a White House official told CNBC that Trump has “not signed off” on the proposed 45-day ceasefire, although the president offered limited details about the negotiations during a press conference.
Despite Monday’s overall market gains, most sectors recorded only modest movements.
Retail stocks stood out with stronger performance, as the Dow Jones U.S. Retail Index rose 1.1%.
Transportation, semiconductor and brokerage shares also posted gains, while pharmaceutical stocks moved lower.
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