Dow futures climbed more than 500 points Monday as Brent crude slid toward $85 a barrel ahead of a Fed rate decision Wednesday
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U.S. stock futures climbed Monday morning after the Trump administration paused plans to escalate its military campaign against Iran, sending oil prices sharply lower heading into a week packed with major tech earnings and a Federal Reserve interest-rate decision.
Dow Jones Industrial Average futures were up roughly 540 points, or about 1%, with S&P 500 futures adding 0.8% and Nasdaq $NDAQ-100 futures climbing approximately 1.3%. Brent crude futures for September delivery fell more than 5% to around $86–$90 a barrel, while U.S. West Texas Intermediate crude dropped around 6% to roughly $84 a barrel.
The pullback in oil prices followed a pause in fighting between the U.S. and Iran over the weekend, which rekindled hopes of a diplomatic resolution. The U.S. had been preparing for a new round of strikes against Iran late last week but stepped back to allow for diplomacy, according to The Wall Street Journal. Officials were also debating the impact of further escalation on the country's munitions supply. Regional tensions were further inflamed when Ukraine attacked an Iranian commercial ship in the Caspian Sea, drawing accusations from Tehran that Kyiv had committed a hostile and criminal act.
Wednesday's Fed interest-rate announcement is drawing close attention, with the Journal describing it as among the most unpredictable such gatherings in recent memory. Traders have assigned a notable chance that the Fed moves to lift its benchmark borrowing rate by 25 basis points at this week's meeting rather than deferring action to September, per CNBC. The consensus view had been that a hike would come in September.
Earnings from four Magnificent Seven members — Amazon $AMZN, Apple $AAPL, Meta $META Platforms, and Microsoft $MSFT — will command investor attention this week, as Wall Street looks for clues about whether the pace of AI investment is moderating or holding firm. The results come after Alphabet $GOOGL's earnings last week disappointed investors. Ken Mahoney, CEO of Mahoney Asset Management, said the central tension is a difficult one for markets. "The biggest risk is the continuation of the spend," Mahoney told CNBC. "And then the problem is, if they do listen to shareholders and wind down a little bit of that spend, or reduce the growth of that spend, then the rest of the market is not going to like it."
U.S. equities are coming off back-to-back losing weeks. On Friday, the S&P 500 shed 0.6% and the Nasdaq dropped 2.1%, while the Dow extended its losing streak to three consecutive weeks.
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