Sunday night trading shifted sharply in favor of bulls as stock futures climbed and oil prices dropped following a weekend pause in fighting between the United States and Iran.
Dow Jones Industrial Average futures rose by 294 points, or 0.6%, as investors welcomed the temporary halt in hostilities between the two nations.
S&P 500 (SPX) futures gained 0.7% while Nasdaq 100 (NDX) futures advanced 1.2%, reflecting broader optimism across equity markets heading into a critical trading week.
Oil markets moved in the opposite direction, with international benchmark Brent crude futures falling more than 5% to around $92 a barrel amid the ceasefire pause.
U.S. West Texas Intermediate crude futures also lost 5%, dropping to around $85 a barrel as traders priced in the reduced geopolitical risk premium.
The relief rally comes after U.S. equities suffered another bruising week, with the ongoing Iran conflict and a pullback in chip stocks dragging major indexes lower.
On Friday, the S&P 500 and the Nasdaq slid 0.6% and 2.1%, respectively, posting back-to-back weekly losses that rattled investor confidence.
The Dow fell 0.4% on Friday, notching a third straight week of declines as uncertainty over the U.S.-Iran conflict continued to weigh on sentiment.
The week ahead presents a demanding gauntlet of megacap earnings, with Amazon (AMZN), Apple (AAPL), Meta Platforms (META), and Microsoft (MSFT) all scheduled to report quarterly results.
Those results will either soothe investor fears of rampant artificial intelligence spending or add to them, after Alphabet’s (GOOGL) disappointing results in the prior week.
The outcomes could directly affect semiconductor companies that are the chief beneficiaries of the AI spending spree, making the earnings slate one of the most consequential of the year.
A Federal Reserve meeting also looms over the week, adding another layer of complexity for traders already navigating geopolitical and earnings-related uncertainty.
