U.S. stock futures pointed to a higher open on Tuesday as markets responded positively to President Donald Trump’s announcement of a ceasefire between Israel and Iran. While the news helped ease concerns over a broader conflict in the Middle East, doubts remain about the ceasefire’s long-term viability. Meanwhile, Federal Reserve Chair Jerome Powell is set to testify before Congress this week, drawing investor focus as political pressure on the Fed intensifies. Oil and gold prices declined as geopolitical tensions began to cool.
U.S. Futures Climb
Stock futures rose early Tuesday, supported by optimism that hostilities between Israel and Iran may be easing. As of 03:40 ET (07:40 GMT), Dow Jones futures were up 347 points (0.7%), S&P 500 futures rose 48 points (0.8%), and Nasdaq 100 futures gained 234 points (1.0%).
Wall Street ended Monday in positive territory, fueled by hopes that the United States would avoid deeper involvement in the Israel-Iran conflict. Over the weekend, fears had grown that U.S. strikes on Iranian nuclear sites could trigger a broader war and disrupt oil supplies. On Monday night, Iran fired missiles at a U.S. military base in Qatar, but no injuries were reported. President Trump dismissed the attack as a “weak” response.
Trump Declares Ceasefire
President Trump announced that a ceasefire between Israel and Iran is “now in effect,” and urged both sides to comply. While the declaration raised hopes of an end to the 12-day conflict, violence has not fully subsided.
An Iranian missile attack on Israel killed four people on Tuesday, according to Israeli emergency services. At the same time, Tehran reported that an Israeli airstrike in northern Iran had killed nine people. Trump indicated that the ceasefire would be phased in, allowing ongoing operations to be completed.
Israeli Prime Minister Benjamin Netanyahu confirmed Israel’s agreement to halt its campaign, claiming that its objectives had been met. Iranian Foreign Minister Abbas Araqchi said Tehran had no plans for further retaliation unless provoked, a stance Netanyahu echoed.
Oil Prices Tumble
Oil prices dropped sharply following the ceasefire news, as fears eased over potential disruptions to crude shipments through the Strait of Hormuz—a critical global oil transit route.
As of 03:16 ET, Brent crude futures had fallen 3.7% to $67.93 per barrel, while West Texas Intermediate (WTI) futures were down 3.6% at $66.04 per barrel. Both benchmarks hit their lowest levels since before the recent escalation. Oil had already declined 9% on Monday amid signs of de-escalation.
Gold Falls as Risk Appetite Returns
Gold prices declined as demand for safe-haven assets fell in response to the reduced geopolitical risk. Spot gold was down 1.4% to $3,320.57 an ounce by 03:25 ET, its lowest level since June 11. August gold futures slipped 1.8% to $3,334.87.
The U.S. dollar weakened slightly, with the dollar index down 0.4% to 98.06. The euro and Japanese yen strengthened, helped by the decline in oil prices, which benefits net importers like the EU and Japan.
U.S. 10-year Treasury yields remained steady following a small drop on Monday, after a Federal Reserve official signaled support for a possible interest rate cut next month.
All Eyes on Powell’s Congressional Testimony
Investor focus is shifting from the Middle East to monetary policy in Washington as Federal Reserve Chair Jerome Powell prepares to begin two days of testimony before Congress starting Tuesday.
Powell is expected to face tough questions about the Fed’s decision to leave interest rates unchanged at its last meeting and maintain a cautious stance amid economic uncertainty. President Trump continued his public attacks, calling Powell “a very dumb, hardheaded person” and pushing for aggressive rate cuts of “two to three points.”
Analysts at ING warned that any perceived change in Powell’s tone could be interpreted as a sign that the Fed’s independence is being undermined by political pressure—a scenario that could lead to sharp declines in the U.S. dollar.
