Stock futures rose early Tuesday after President Donald Trump said that a ceasefire between Israel and Iran had come into effect, marking the latest sign of easing tensions in the Middle East.
Futures tied to the Dow Jones Industrial Average added 350 points, or 0.8%. S&P 500 futures gained 0.9%, while Nasdaq 100 futures rose 1.2%.
“THE CEASEFIRE IS NOW IN EFFECT. PLEASE DO NOT VIOLATE IT!” Trump said in a post on Truth Social around 1 a.m. ET. That comes after he had announced the ceasefire hours earlier, which Israel confirmed.
Brent crude futures and West Texas Intermediate futures were down more than 3%, as concerns over an oil supply disruption dissipated.
“With Israel/Iran seemingly defused, the market is resuming its march to/through all-time highs,” traders at JPMorgan wrote. “With this geopolitical risk behind us, the Market is refocusing on the macro picture, preparing for earnings, and watching the looming deadline on the expiration of the tariff moratorium.”
To be sure, the conflict is not fully over. Israel has already accused Tehran of violating the ceasefire, while Iran said it remains “with hands on the trigger.” Trump later said both Iran and Israel violated the ceasefire.
Tuesday’s gains in stock futures put the Street on track to build on Monday’s strong advances. The major averages jumped after Qatar’s Defense Ministry said that its air defense had intercepted Iran’s retaliatory strike on a U.S. military base.
Stocks also caught a tailwind from falling oil prices on Monday. WTI futures reached their highest levels since January overnight, but settled down more than 7%.
On Tuesday morning, traders will watch Federal Reserve Chairman Jerome Powell as he speaks before the House Financial Services Committee and presents the central bank’s monetary policy report. The central bank chief will go before the Senate Banking Committee on Wednesday.
Powell’s appearance on Capitol Hill comes at a pivotal time: He is facing an aggressive push from the White House to cut rates — and in recent days two Fed officials have said they could see a case for dialing back policy as early as July.
—CNBC’s Jeff Cox contributed reporting.
Markets still vulnerable to Iran-Israel escalation, Barclays warns
Despite a ceasefire being put in place, equity markets may not be in the clear, according to Barclays.
“Middle East conflict poses acute risks; markets could react sharply to Iran-Israel escalation, which could then spark Vol Control/CTA de-risking,” strategist Venu Krishna wrote. “Vol Control funds have steadily doubled up their equity exposure from Apr lows to ~45% now. While it still pales in comparison to the YTD highs of 80+%, the spillover of macro shocks from the Middle East into higher equity volatility presents a clear risk.”
— Fred Imbert
Energy was the only sector to end Monday negative
The energy sector fell 2.51% on Monday, making it the only one to end the session negative. Oil prices fell as investors appeared to look past a retaliatory strike from Iran on a U.S. military base in Qatar.
All of the 10 other sectors rose on Monday, led by consumer discretionary, which added 1.75%.
The consumer discretionary, energy, materials and health care sectors all remain more than 10% off their 52-week highs.
— Christopher Hayes, Lisa Kailai Han
Stock futures rise after Trump announces ceasefire timeline between Israel and Iran
Stock futures took a leg higher after President Donald Trump took to social media to announce a ceasefire timeline he said will begin around midnight Tuesday and end the war between Israel and Iran.
“It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE (in approximately 6 hours from now, when Israel and Iran have wound down and completed their in progress, final missions!), for 12 hours, at which point the War will be considered, ENDED!” the president wrote in a Truth Social post. “On the assumption that everything works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to end, what should be called, ‘THE 12 DAY WAR.'”
Representatives for Israel and Iran did not immediately appear to confirm the agreement.
Prior to Trump’s announcement, stock futures had been trading around the flatline.
— Kevin Breuninger, Lisa Kailai Han
Stocks making the biggest moves after the bell: KB Home, Chewy
These are the stocks moving the most in extended-hours trading:
KB Home — The homebuilding stock slipped 2% after KB Home lowered its full-year housing revenues guidance to the range of between $6.3 billion to $6.5 billion. Previously, the company had predicted a range of between $6.6 billion to $7 billion. Shares fell despite KB Home posting a second-quarter earnings and revenue beat.Chewy — Shares fell 3% after the pet food and products retailer announced an underwritten public offering of $1 billion of its Class A common stock through JPMorgan. Concurrently, Chewy also agreed to a $100 million share repurchase program.— Lisa Kailai Han
Stock futures are little changed
Stock futures traded near flat Monday night.
Futures tied to all three major averages were trading around the flatline shortly after 6 p.m. ET.
— Lisa Kailai Han
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