US-Iran Framework Lifts Dow Futures 430 Points

On Monday, Dow futures jumped about 430 points after the United States and Iran reached a preliminary agreement to end months of fighting and reopen the Strait of Hormuz. In premarket trade, futures tied to the Dow Jones Industrial Average rose about 427 points, S&P 500 futures advanced roughly 1.2% and Nasdaq 100 futures climbed about 2%.

Washington and Tehran agreed on a framework intended to halt the fighting and restore traffic through the Strait of Hormuz, with an expected signing in Switzerland on Friday. The agreement is preliminary and does not address Iran’s nuclear program or wider tensions linked to Lebanon and Israel, leaving the possibility that negotiations could still falter before the planned signing.

Global crude prices fell more than 4% after the announcement. The decline removed part of the wartime premium in energy markets and pushed gains in fuel-sensitive companies. Airline shares such as Delta and cruise operator Norwegian Cruise Line moved higher on the prospect of lower fuel costs, while oil producers including Exxon Mobil and Occidental faced selling pressure. Some analysts say Brent crude could remain near $80 a barrel while shipping through Hormuz normalizes and damaged regional infrastructure is repaired.

The drop in oil eased some inflation concerns but market focus shifted to the Federal Reserve. Traders expect policy rates to be left unchanged at the central bank meeting this week, where the new chair, Kevin Warsh, will present updated economic projections. The two-year Treasury yield fell to a two-week low, though markets still price in the possibility of at least one 25-basis-point hike before year-end.

Activity in the IPO market drew attention. Shares of SpaceX rose about 6% in premarket trading after closing at $160.95 in their Nasdaq debut, above the $135 IPO price. The smooth listing reduced immediate concerns about large offerings and put focus on other potential IPOs later this year.

Deal news also shaped trading. Paramount Skydance shares climbed after the U.S. Justice Department approved its acquisition of Warner Bros.

In Max Kettner’s view, ‘if the deal proves credible and lasting, it should be positive for risk assets,’ reflecting a view among some strategists that durable diplomacy would support riskier markets.

The Strait of Hormuz handles a large share of seaborne oil flows, so reopening the waterway removes a key supply risk that had pushed crude and energy-linked inflation expectations higher. Markets will watch developments through the end of the week as negotiators move toward the planned signing.