Stock futures jumped early Tuesday as oil prices slid and hope grew that a resolution to the U.S.-Iran war was within reach.
Dow Jones Industrial Average futures popped 319 points, or 0.63%. S&P 500 futures gained 0.65%, and Nasdaq-100 futures advanced 0.87%. U.S. stock markets were closed Monday due to the Memorial Day holiday.
President Donald Trump said Monday that talks with Iran to end the war were “proceeding nicely.” That said, he did warn the U.S. could go on the offensive if negotiations break down.
Crude prices dropped sharply following Trump’s comments. West Texas Intermediate futures for July were last down over 5%, while Brent futures were trading nearly 2% higher.
The S&P 500 climbed 0.9% last week to notch its longest weekly winning streak since late 2023. The Dow climbed 2.1%, marking its third weekly gain in four weeks. The Nasdaq rose 0.5% last week, its seventh in eight weeks.
“There is no doubt that fundamentals are at least partially responsible for the market rally,” wrote Adam Parker, founder of Trivariate Research. “With earnings projected to grow 23% this year, and 16% next year, there’s a credible argument to make that despite the increasing projections for earnings, and strong earnings growth, the price-to-forward earnings has been modestly contracting.”
A decline in oil prices also boosted equities last week. U.S. crude lost 8.4%, marking its worst week since April 17.
However, with crude still trading well above the levels seen earlier in the year – and price pressures remaining elevated – investor expectations for easier Federal Reserve policy have been tempered. In fact, traders are pricing in an 8.5% chance of a rate hike in July, up from 0.9% a month ago, according to the CME Group’s FedWatch tool.
Asia markets close mixed as South Korea’s Kospi hits a fresh record
South Korea’s Kospi closed 2.55% higher on Tuesday to hit 8,047.51, after rising to a record high of 8,131.15 in intraday trade. The small-cap Kosdaq pared gains, ending 0.98% higher.
Japan’s Nikkei 225 ended Tuesday’s session 0.25% lower at 64,996.09 amid some profit taking, while the Topix was marginally lower at 3,938.46. The Nikkei 225 breached 65,000 for the first time Monday in holiday-thinned Asia trading.
Australia’s S&P/ASX 200 fell 0.39% at 8,657.80.
China’s CSI 300 gained 0.53% at 4,947.85, while Hong Kong’s Hang Seng was flat in choppy trade following a public holiday on Monday.
India’s Nifty 50 slipped 0.23%, while the BSE Sensex declined 0.28%.
— Justina Lee
South Korea’s Kospi hits fresh record amid mixed trading in other Asian markets
South Korea’s Kospi hit a fresh record Tuesday as trading resumed after a public holiday, with investor sentiment supported by hopes for a breakthrough in the U.S.-Iran peace talks.
The Kospi rose to a fresh high of 8,094.90 in early trade, while the small-cap Kosdaq pared gains and was 1.44% higher.
Japan’s Nikkei 225 slipped 0.61% amid some profit taking, while the Topix declined 0.19%. The Nikkei 225 breached 65,000 for the first time Monday in holiday-thinned Asia trading. The Bank of Japan’s Deputy Governor Ryozo Himino said the timing of a rate hike is still being considered, as the central bank continues to monitor developments in the Middle East, according to Reuters.
Australia’s S&P/ASX 200 fell 0.50%.
China’s CSI 300 opened unchanged, while Hong Kong’s Hang Seng slipped 0.49% following a public holiday on Monday.
— Justina Lee
Trump says U.S.-Iran talks are ‘proceeding nicely’
President Donald Trump said in a Truth Social post that talks between the U.S. and Iran to end the war are “proceeding nicely.” However, he warned that the U.S. could go back on the offensive is discussions falter.
“It will only be a Great Deal for all or, no Deal at all,” Trump wrote.
— Fred Imbert
