Wall Street futures hold steady as U.S.-Iran talks, Fed outlook guide markets

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Wall Street futures steady on US-Iran, Fed

Highlights

U.S.-Iran talks conclude with a 60-day roadmap toward a final deal, prompting oil prices to fall as much as 2%.
Premarket: Micron Technology, Sandisk rise about 3.5% each, Intel adds 4.1%, SpaceX falls 3.7% to $178, Apogee Therapeutics surges 53% on AbbVie $10.9 billion acquisition news.
Investors await Thursday's PCE inflation data after two-year Treasury yield hits 4.230% and markets anticipate a 25 basis point Fed rate hike in September.

Geopolitics and corporate gains shape early trading

As reported by Reuters, U.S. stock index futures begin the week on a subdued note as investors track developments in U.S.-Iran negotiations after an initially tense start. The first round of talks concludes with Washington and Tehran agreeing to a roadmap toward a final deal within 60 days, while oil prices fall as much as 2%.

Expectations for a peace deal help the three main indexes post strong weekly gains on Thursday before Friday's public holiday. The Nasdaq rises 2.4%, with technology stocks continuing to lead the market higher.

In premarket trading, memory chipmakers move up, with Micron Technology and Sandisk gaining about 3.5% each, while Intel adds 4.1%. SpaceX slips 3.7% to $178 after two straight sessions of declines following its market debut, and Apogee Therapeutics surges 53% after the Financial Times reports that AbbVie is nearing a roughly $10.9 billion acquisition of the drug developer.

Inflation data and rate expectations test rally

At 04:53 a.m. ET, Dow E-minis are down 49 points, or 0.09%, S&P 500 E-minis are down 12 points, or 0.16%, and Nasdaq 100 E-minis are up 2.5 points, or 0.01%. The next major test for the rally comes on Wednesday with Micron's quarterly results, after the company's shares climb nearly 300% this year.

AI-driven optimism continues to underpin Wall Street's recent advance, while a resilient U.S. economy and hopes for an end to the four-month Middle East war support broader risk appetite. Michele Morganti, senior equity strategist at Generali Investments, says the backdrop for equity markets remains broadly constructive following the announced U.S.-Iran deal, with AI momentum, solid U.S. growth and resilient emerging market economies all contributing.

Investors also focus on Thursday's PCE data, the Federal Reserve's preferred measure of core inflation. A stronger-than-expected reading could reinforce expectations of a hawkish Fed after Chair Kevin Warsh's first meeting on Wednesday underscores the need to curb inflation, while LSEG data shows markets currently expect a 25 basis point rate hike in September and the two-year Treasury yield reaches 4.230%, its highest level since early 2025.

Comments this week from central bank officials including New York Fed President John Williams and Chicago Fed President Austan Goolsbee are also likely to be closely watched after policymakers signal higher borrowing costs at last week's meeting.

In our earlier article on WTI crude staying under pressure after reduced Strait of Hormuz shipping risks, we noted that signs of progress in U.S.-Iran talks and expectations of recovering Persian Gulf oil flows sparked profit-taking after June’s rally. We also highlighted that the technical picture remained bearish below the $80–82 resistance zone, while traders kept watching for any renewed disruptions that could quickly restore a risk premium.

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