Wall Street futures climb as U.S.-Iran deal lifts risk sentiment

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Wall Street futures rise on Iran deal

Highlights

Wall Street futures rise over 1% as investors react positively to the anticipated U.S.-Iran framework deal, with Dow E-minis up 519 points, S&P 500 E-minis up 94.5 points, and Nasdaq 100 E-minis up 622 points.
Brent crude drops over 4% to the lowest since March amid the deal, shifting attention to energy-sensitive stocks like Delta, Norwegian Cruise, Occidental, and Exxon, though analysts expect crude could stay near $80 a barrel.
SpaceX surges 6% in premarket to $160.95 after IPO at $135, while Paramount Skydance rises 5.8% following regulatory clearance for its Warner Bros. acquisition.

Market reaction to deal and oil pullback

As reported by Reuters, futures tied to Wall Street's main indexes are rising more than 1% on Monday as investors welcome the framework agreement, which is expected to be officially signed on Friday in Switzerland.

The move is accompanied by a sharp drop in crude prices, with oil falling more than 4% to its lowest level since March. That shift is likely to direct attention later in the day toward energy price-sensitive stocks including airlines and cruise operators such as Delta and Norwegian Cruise, as well as major energy companies including Occidental and Exxon.

Max Kettner, chief multi-asset strategist at HSBC Global Investment Research, says that if the overnight news of a deal between the U.S. and Iran proves credible and lasting, markets should treat it as a positive outcome. He adds that any setbacks are likely to be taken as less of a negative by risk assets.

Analysts still caution that Brent crude could hover around $80 a barrel despite the apparent breakthrough, as energy shipments resume through the Strait and Middle Eastern producers work to restore damaged infrastructure.

Fed outlook and corporate movers in focus

Last week's data showed that higher energy costs were feeding into consumer inflation, sharpening market focus on the Federal Reserve's policy meeting later this week. The yield on the benchmark 2-year Treasury note, which reflects interest rate expectations, is down 7 basis points to a two-week low.

The Fed is expected to leave interest rates unchanged, although traders still expect at least a 25 basis point increase by year-end, according to CME Group's FedWatch tool. Attention is also turning to Fed Chair Kevin Warsh's first meeting at the helm, with investors watching his communication style and the central bank's economic and rate projections for clues on the policy path.

At 04:03 a.m. ET, Dow E-minis are up 519 points, or 1.01%, S&P 500 E-minis are up 94.5 points, or 1.27%, and Nasdaq 100 E-minis are up 622 points, or 2.1%. All three indexes ended the previous week higher despite early pressure on AI shares, with analysts citing the tech sector's sensitivity to higher rates and positioning ahead of SpaceX's IPO.

Among individual stocks, SpaceX shares are up 6% in premarket trading after ending at $160.95 per share following a debut from an IPO price of $135. Paramount Skydance shares are also gaining 5.8% after the U.S. Justice Department clears the company's acquisition of Warner Bros.

In our earlier article on the preliminary U.S.–Iran agreement to resume shipping through the Strait of Hormuz, we covered how the framework was expected to be formally signed in Switzerland and followed by 60 days of negotiations on Iran’s nuclear program. We also noted that the announcement immediately pressured oil prices lower amid uncertainty over the deal’s full terms and differing interpretations, even as investors watched for what restored flows could mean for inflation and broader risk assets.

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