S&P 500 and Nasdaq Futures Higher Monday as U.S.-Iran Tensions Ease

TLDR

• U.S. stock futures climbed Monday after the U.S. and Iran agreed to halt strikes near the Strait of Hormuz
• Nasdaq 100 futures rose 1.2%, S&P 500 futures up 0.8%, Dow futures gained 0.4%
• The Magnificent Seven tech stocks lost nearly $2.8 trillion in market cap this month
• Oil prices edged higher, with Brent crude rising 1.1% to over $73 a barrel
• The June jobs report drops Thursday in a holiday-shortened trading week

U.S. stock futures pushed higher Monday morning after reports confirmed the U.S. and Iran reached an agreement to stop a series of military exchanges near the Strait of Hormuz.

Nasdaq 100 futures led gains, rising 1.2%. S&P 500 futures added 0.8%, while Dow Jones futures were up 0.4%.

The news gave markets a lift after a bruising week. The Nasdaq Composite fell more than 4.5% last week, and the S&P 500 dropped over 2%. The Nasdaq had its longest losing streak since January, falling for five straight sessions.

Tech Stocks Under Pressure

The so-called Magnificent Seven group of large technology companies has had a rough month. The group has collectively shed nearly $2.8 trillion in market capitalization in June — a monthly record, according to FactSet.

Nvidia and Alphabet both saw their shares fall more than 8% last week alone.

The Dow held up better, eking out a 0.6% weekly gain. Healthcare stocks helped cushion the blow as tech dragged on broader indexes.

The Iran Factor

Tensions escalated over the weekend after the U.S. launched strikes on Iranian military targets. Washington said the action came in response to Iranian attacks along the Strait of Hormuz.

President Trump posted on Truth Social that the U.S. may “militarily complete the job,” raising fears of broader conflict. Those fears pushed oil prices higher.

Brent crude futures gained 1.1% to over $73 a barrel. West Texas Intermediate rose 1.4%, topping $70.

But oil gains remained contained. ING analyst Francesco Pesole wrote in a note that investors were holding to an “optimistic stance,” adding that any real disruption to Strait of Hormuz flows would be the key tipping point.

By Sunday, both sides agreed to stop strikes and return to peace talks. The exchange had been the worst outbreak of conflict since both nations signed a memorandum of understanding on June 17.

What’s Ahead This Week

Markets are on a shortened schedule this week. Trading closes Friday for the July 4th Independence Day holiday.

The June jobs report will be released Thursday, a day earlier than usual. The nonfarm payrolls data is closely watched by the Federal Reserve as it sets interest rate policy.

Before that, the Job Openings and Labor Turnover Survey drops Tuesday, and the ISM Manufacturing PMI comes Wednesday.

New Federal Reserve Chairman Kevin Warsh will make his first international appearance at the European Central Bank’s annual forum in Sintra, Portugal. His comments will be closely watched for any clues on the Fed’s rate path.

The 10-year U.S. Treasury yield stood at 4.382% Monday morning, ticking up slightly from the prior week.

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