U.S. stock futures pointed to a firmer open on Tuesday, suggesting markets could extend gains after finishing the previous session mostly higher, despite retreating significantly from their intraday peaks.
Investor sentiment appeared to improve following a sharp decline in oil prices, with U.S. crude futures falling more than 2%.
Oil prices dropped below $90 per barrel after President Donald Trump stated that the United States and Iran could reach a peace agreement within “two or three days.”
Trump also told reporters that the Strait of Hormuz would reopen “immediately” once an agreement is finalized, although similar comments in recent weeks about an imminent deal have yet to result in a formal breakthrough.
Market participants may also continue to seek buying opportunities after last Friday’s broad sell-off, which left many stocks trading at lower valuations.
Stocks rallied strongly at the start of Monday’s session as investors returned to the market following Friday’s sharp decline. However, gains faded as trading progressed, and the major indices finished well below their highs, with the Dow eventually slipping into negative territory.
After climbing as much as 1.8% during the session, the Nasdaq finished up 220.23 points, or 0.9%, at 25,929.66. The S&P 500 added 21.99 points, or 0.3%, to close at 7,405.73, while the Dow Jones Industrial Average fell 80.77 points, or 0.2%, to 50,786.01.
The initial recovery on Wall Street was driven in part by bargain hunting after Friday’s sell-off pushed the Nasdaq to its lowest closing level in a month.
As the session progressed, enthusiasm moderated as oil prices remained elevated amid reports that Israel and Iran had exchanged missile strikes over the weekend.
Crude prices later retreated from their highs after President Donald Trump said Israel and Iran were “looking to do an immediate ceasefire.”
“Final negotiations on ‘Peace’ are proceeding, subject to ignorance or stupidity getting in its way,” Trump said in a post on Truth Social. “The Blockade will remain in place, and in full force and effect, until a ‘Final Deal’ is reached. Things should move quickly.”
While broader market gains faded, semiconductor stocks maintained strong momentum. The Philadelphia Semiconductor Index surged 5.6%, recovering part of the 10.3% decline recorded in the previous session.
Marvell Technology (NASDAQ:MRVL) jumped 9.6% after it was announced that the chipmaker will join the S&P 500 index alongside electronics manufacturing services company Flex (NASDAQ:FLEX).
Nvidia (NASDAQ:NVDA) gained 1.7% after unveiling a multi-year technology partnership with SK hynix aimed at advancing next-generation memory solutions for AI infrastructure and accelerating semiconductor development and manufacturing.
Higher oil prices also supported energy-related shares, with the Philadelphia Oil Service Index advancing 3.6%.
Oil producers and computer hardware companies posted notable gains, while utilities and commercial real estate stocks faced pressure as Treasury yields continued to move higher.