U.S. stock futures climbed in overnight trading Sunday after reports emerged that Washington and Tehran agreed to halt military strikes and will meet Tuesday in Qatar to resume ceasefire negotiations.
The SPDR S&P 500 ETF Trust (SPY), the Invesco QQQ Trust (QQQ), and the SPDR Dow Jones Industrial Average ETF Trust (DIA) all traded higher following the news.
S&P 500 futures gained 0.45%, Dow futures were up 0.22%, and Nasdaq 100 futures climbed 0.43% as of 9:08 PM EDT Sunday.
The latest flare-up began Thursday when Iran claimed responsibility for attacks on commercial ships in the Strait of Hormuz, triggering a series of U.S. retaliatory strikes over the weekend.
Iran also targeted a container ship, an oil vessel carrying Qatari crude, and military bases in Kuwait and Bahrain, intensifying the conflict and alarming global energy markets.
U.S. President Donald Trump responded forcefully on Truth Social late Saturday, saying “United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN! It is very possible that they will never learn!”
Trump followed that post with a stark warning, stating “There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist!”
The escalation came roughly 10 days after the two countries signed a ceasefire in Switzerland to formally end a conflict that began in late February.
According to an Axios report, a senior U.S. official told the outlet “We decided to stop all the kinetic activity,” signaling a pause in military action, while another official said both countries will stand down “for now” and that “vessels can move freely” through the Strait of Hormuz as talks resume.
Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab, told Bloomberg that “Investors see the exchange of attacks between the US and Iran as temporary and do not believe the situation will escalate into another war.”
Jim Chanos, the founder of Kynikos Associates, was more skeptical, posting on X that “It’s literally the same story leaked every Sunday afternoon.”
U.S. markets had a rough finish to last week, with the S&P 500 and Nasdaq shedding 1.95% and 4.48% respectively, while the Dow Jones Industrial Average bucked the trend with a 0.62% weekly gain.
The divergence reflected a broad rotation out of technology stocks, with investors moving into less tech-exposed sectors as AI-linked names faced particular pressure.
Western Digital Corp. (NASDAQ: WDC) was among the hardest hit, sliding more than 13% at Friday’s close and emerging as one of the biggest casualties of the tech selloff.
Strategy (NASDAQ: MSTR), the Bitcoin treasury company, drew fresh scrutiny after its market-value-to-net-asset-value ratio fell below 1 for the first time, with analysts arguing the development undermines the premium model that has funded its Bitcoin-buying strategy.
Sellas Life Sciences Group (NASDAQ: SLS) continued to attract retail trader attention after short interest hit an all-time high last week, alongside speculation about a potential acquisition tied to revisions in executive severance terms.
Wendy’s Co. (NASDAQ: WEN) posted its best weekly gains in more than six years, with retail traders actively debating the fast food chain’s potential turnaround narrative.
Crude oil markets responded to the Middle East developments, with Brent crude futures up 0.92% to around $72.65 per barrel and WTI crude climbing approximately 1% to $69.92 per barrel late Sunday.
Beyond geopolitics, investors will be monitoring several key U.S. economic releases this week, including the June non-farm payroll report, the ISM Manufacturing PMI, and remarks from Federal Reserve Chair Kevin Warsh at the ECB Forum on Central Banking in Sintra, Portugal.
