June 15 - Futures linked to Wall Street's principal indexes climbed by more than 1% each on Monday as investors reacted positively to a preliminary agreement between the United States and Iran intended to halt a conflict that lasted more than three months and to reopen the strategic Strait of Hormuz.
The framework that investors welcomed did not tackle a number of unresolved issues, notably Iran's nuclear program and the concurrent conflict between Lebanon and Israel. The agreement is slated to be formally signed on Friday in Switzerland.
Energy markets responded quickly. Crude prices plunged by more than 4%, falling to their weakest levels since March on the news. That sharp drop in oil has shifted attention toward sectors sensitive to energy prices, including airlines and cruise operators such as Delta and Norwegian Cruise, as well as energy producers including Occidental and Exxon.
"If the overnight news of a deal between the U.S. and Iran proves to be credible and lasting, this should be taken as a positive, whereas setbacks will likely be taken as less of a negative by risk assets," said Max Kettner, chief multi-asset strategist at HSBC Global Investment Research.
Even with the apparent de-escalation, some analysts warned Brent crude could remain around $80 a barrel as energy shipments resume through the Strait of Hormuz and as damaged regional infrastructure is repaired. Those cautions reflect the practical steps required to restore full flows and the impact of infrastructure work on supply dynamics.
Recent data had shown that earlier energy price increases were already feeding into consumer inflation, intensifying investor focus on the Federal Reserve's outlook ahead of the monetary policy meeting later in the week. Market-implied interest rate expectations moved in response: the yield on the benchmark 2-year Treasury note, which reflects short-term interest rate expectations, slipped 7 basis points to a two-week low.
On futures screens at 04:03 a.m. ET, Dow E-minis were higher by 519 points, or 1.01%, S&P 500 E-minis were up 94.5 points, or 1.27%, and Nasdaq 100 E-minis were up 622 points, or 2.1%.
In premarket trading, shares of SpaceX rose 6% after the company closed at $160.95 per share at its market debut, above the IPO price of $135. The smooth trading in SpaceX's landmark Nasdaq listing provided relief across trading desks and exchanges preparing for the large IPOs of OpenAI and Anthropic later in the year.
All three major indexes finished the prior week higher despite pressure on artificial intelligence-related stocks earlier in the week. Analysts attributed the earlier sell-off to the tech sector's sensitivity to rising interest rates and to positioning ahead of the high-profile SpaceX initial public offering.
Attention this week is expected to center on the Federal Reserve's meeting led by Fed chair Kevin Warsh, in his first gathering at the helm. Investors will be parsing his communication approach and the Fed's economic and interest rate projections for guidance on the likely path of policy.
Among other movers, Paramount Skydance shares rose 5.8% after the U.S. Justice Department cleared the company's acquisition of Warner Bros.
Market indicators cited in trading and commentary:
- NDX +0.64%
- US500 +0.5%
- DJI +0.7%
- XOM +0.28%
- OXY +1.93%
- LCO -4.83%
- DAL +1.5%
- US2YT=X -1.13%
- NCLH +1.94%
- SPCX +19.22%
- OAI 0.00%
- ANTP 0.00%
See the trade on XOM, but can't pull the trigger? Most traders can read a chart. The hard part is the moment: entry window open, pattern forming, and you're still waiting for more confirmation. That's the conviction gap - and our chart analysis closes it. Unlike other AIs that just read data, our Vision AI literally "sees" your charts and hands you a complete trading plan: entry, stop-loss, and profit target in under 60 seconds. Know exactly what to do next, every time. Try Chart Analysis for XOM