U.S. stock futures were little changed Monday as investors tracked developments in the U.S.-Iran peace negotiations. Nasdaq $NDAQ-100 futures were nearly unchanged, while S&P 500 futures edged down 0.1%. Futures on the Dow Jones Industrial Average were off roughly 29 points, a decline of 0.1%.
A joint announcement from mediators Qatar and Pakistan that Washington and Tehran had settled on a 60-day framework for reaching a final agreement sent oil prices lower. Brent crude fell 1.7% to around $79.20 a barrel. WTI crude, which had surged as much as 3% in overnight trading, reversed course and was last down roughly 0.8% at $76 a barrel.
The weekend talks got off to a rough start. Hezbollah-related tensions in Lebanon prompted Tehran to announce a closure of the Strait of Hormuz on Saturday, and Trump responded with threats targeting Iran, throwing the early rounds of negotiation into disarray, according to The Wall Street Journal. Entering Monday, the mediators reported that direct contact between Washington and Tehran had been restored, and working-level discussions were expected to carry on for the remainder of the week.
Yields on 10-year U.S. Treasuries were approaching 4.5%, reflecting market expectations that the Fed would be forced to tighten policy in response to inflationary pressures that have built up during the extended Hormuz blockade. Markets moved up their timetable for a Fed rate increase to October or earlier after last week's meeting struck a hawkish tone.
Losses on Wednesday, which stemmed from unease about where interest rates are headed, were overcome by a Thursday rebound that left all three major indexes in positive territory to end a shortended trading week (markets were closed on Friday for the Juneteenth federal holiday.). For the week, the Nasdaq Composite led the way with a gain of more than 2%, and both the S&P 500 and the Dow each added roughly 1% — marking a 12th winning week out of the last 13 for the S&P.
Investors will next turn their attention this week to the release of the May personal consumption expenditures price index, the Fed's preferred inflation gauge. Forecasters surveyed by FactSet anticipate that the core PCE reading, which omits food and energy costs, will come in above April's level.