TLDR
- S&P 500, Nasdaq 100, and Dow futures all rose sharply Monday morning in premarket trading
- Oil prices dropped over 5% after reports that the US and Iran agreed to pause hostilities
- Lower oil prices pushed bond yields down, easing inflation fears
- The Fed meets Wednesday, with markets split between a hold or a rate hike
- Microsoft, Meta, Apple, and Amazon are all set to report earnings this week
US stock futures jumped Monday as oil prices fell sharply, giving investors relief after a rough week driven by Middle East tensions and inflation fears.
S&P 500 futures rose 0.8%, Nasdaq 100 futures climbed 1.4%, and Dow Jones futures added around 400 points heading into the open.
Why Oil Fell
Brent crude dropped 5% to $87.13 a barrel, and West Texas Intermediate fell 5.5% to $84.37. The sell-off came after reports that President Trump paused air strikes on Iran to allow diplomacy to move forward, according to The Wall Street Journal.
The three major indexes had all fallen last week as Middle East fighting drove oil prices higher, raising concerns about inflation and putting pressure on the Fed.
“Reports that the US and Iran have agreed to a pause in hostilities has been warmly welcomed by investors,” said Kathleen Brooks, research director at XTB.
“This has dramatically reduced the geopolitical risk premium,” she added.
With oil prices falling, bond yields pulled back too. The 10-year Treasury yield slipped 4 basis points to 4.64%.
All Eyes on the Fed
The Federal Reserve meets Wednesday, and markets are not certain what comes next. According to the CME FedWatch tool, traders are pricing in a 66% chance of a hold and a 34% chance of a rate hike.
The outcome will likely shape how markets move through the rest of the week.
Big Tech Earnings in Focus
This week also brings a wave of earnings from some of the largest companies in the market. Microsoft, Meta Platforms, Apple, and Amazon are all scheduled to report results.
Investors will be watching closely for signs of how long the artificial intelligence spending boom can continue.
The results could shift sentiment quickly, depending on whether companies beat or miss expectations.
Where Things Stand
Futures pointed to a strong open on Monday, with the Dow set to gain nearly 1%, the S&P 500 up close to 1%, and the Nasdaq leading with a 1.4% rise in early trading.
The move comes after last week’s broad losses tied to geopolitical risk. Investors appear cautiously optimistic heading into a packed week for both policy and corporate news.
The combination of easing oil prices, a clearer Middle East picture, and upcoming tech earnings has shifted sentiment for now.
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