U.S. stock futures pointed to a higher open on Tuesday as investors reacted positively to President Donald Trump’s announcement of a ceasefire between Israel and Iran. While the move lifted sentiment and reduced concerns over a broader conflict in the Middle East, questions remain about the durability of the truce. Meanwhile, Federal Reserve Chair Jerome Powell is set to deliver testimony before Congress this week, drawing attention amid ongoing criticism from Trump. Oil and gold prices declined as geopolitical tensions eased.
U.S. Futures Rise
Stock futures advanced early Tuesday, buoyed by optimism that tensions between Israel and Iran may be subsiding. As of 03:40 ET, Dow Jones futures had gained 347 points (0.7%), S&P 500 futures rose by 48 points (0.8%), and Nasdaq 100 futures increased 234 points (1.0%).
Monday’s gains on Wall Street were driven by hopes that the U.S. would avoid deeper involvement in the Israel-Iran conflict, which had fueled fears of a wider regional war and disruptions to global oil supplies. Tensions had escalated over the weekend with concerns about potential U.S. strikes on Iranian nuclear facilities. Iran responded by launching missiles at a U.S. base in Qatar late Monday, but no injuries were reported. Trump described the attack as a “weak” response.
Trump Announces Ceasefire
President Trump declared that a ceasefire between Israel and Iran was “in effect,” urging both sides to honor the agreement. While the announcement raised hopes of an end to the 12-day conflict, it was accompanied by reports of continued violence.
An Iranian missile strike on Israel killed four people on Tuesday, according to local emergency services. Simultaneously, Tehran reported that an Israeli attack in northern Iran left nine dead. Trump indicated the ceasefire would be phased in, with existing operations allowed to conclude.
Israeli Prime Minister Benjamin Netanyahu stated that Israel had agreed to halt its military campaign, claiming the country had met its objectives. Iranian Foreign Minister Abbas Araqchi echoed the sentiment, saying Tehran did not plan further retaliatory actions unless provoked.
Oil Prices Drop
Crude oil prices fell sharply following news of the ceasefire, as fears of supply disruptions through the Strait of Hormuz—one of the world’s most critical oil shipping routes—eased.
By 03:16 ET, Brent crude futures had declined 3.7% to $67.93 per barrel, while U.S. West Texas Intermediate (WTI) futures fell 3.6% to $66.04, marking the lowest levels since before the conflict escalated earlier this month. Oil had dropped 9% on Monday as signs of de-escalation emerged.
Gold Retreats Amid Risk-On Sentiment
Gold prices fell as easing geopolitical tensions reduced demand for traditional safe-haven assets. Spot gold dropped 1.4% to $3,320.57 an ounce by 03:25 ET, its lowest level since June 11. August gold futures slipped 1.8% to $3,334.87.
The U.S. dollar weakened slightly, with the dollar index slipping 0.4% to 98.06. The euro and Japanese yen gained ground, supported by declining oil prices, which benefit energy-importing economies such as those in the EU and Japan.
Benchmark U.S. 10-year Treasury yields remained steady after a slight decline on Monday, following dovish comments from a Fed official who signaled support for a rate cut next month.
Powell Heads to Capitol Hill
Investor attention is now shifting from global tensions to domestic monetary policy, as Federal Reserve Chair Jerome Powell prepares to testify before Congress over two days starting Tuesday.
Powell is expected to face tough questioning over the Fed’s recent decision to hold interest rates steady, amid ongoing trade policy uncertainty and political pressure. President Trump continued his criticism of Powell on social media, calling him “a very dumb, hardheaded person,” and demanding significant rate cuts of “two to three points.”
Analysts at ING warned that any perceived shift in Powell’s stance could be interpreted as the Fed yielding to political influence, potentially triggering a sharp depreciation in the U.S. dollar.