U.S. stock futures surged on Monday after a preliminary peace agreement between the United States and Iran was announced, easing fears of prolonged conflict and the reopening of the Strait of Hormuz. Dow futures rose 427 points (0.8%), S&P 500 futures advanced 1.2%, and Nasdaq 100 futures jumped 2%, as investors shifted back into risk assets.
The deal, which aims to end more than three months of hostilities, sent oil prices tumbling over 4%. Brent crude and West Texas Intermediate were on track for their lowest settlements in over three months. The energy sector faced immediate pressure, with Chevron dropping 2.5% and Exxon Mobil falling 2.6%. Conversely, airlines and cruise operators surged on expectations of lower fuel costs: American Airlines climbed 3.7%, Delta Air Lines 3.8%, and United Airlines 4.6%.
Artificial intelligence and data infrastructure stocks led the premarket rally. SpaceX jumped 5.6% after its 19% debut gain on Friday, while Micron Technology rose 7.4% and Sandisk gained 5.2%. Hard disk-drive makers Seagate Technology and Western Digital rose 7.25% and 5.3%, respectively. Tower Semiconductor added 4.7% after a multi-year deal to supply AI-driven optical connectivity components.
The agreement, while not yet resolving Iran’s nuclear program or broader regional tensions, provided enough diplomatic momentum to rekindle risk appetite. However, analysts cautioned that the deal could still stumble before the expected signing in Switzerland on Friday. The Federal Reserve’s upcoming policy meeting also remained in focus, with updated economic projections and Chair Kevin Warsh’s first meeting. The two-year Treasury yield slipped to a two-week low as rate hike expectations were reassessed.
Overall, the session highlighted a clear rotation from energy into technology and travel, driven by geopolitical relief and the prospect of sustained AI growth.
