U.S. equity futures pointed higher on Tuesday while oil prices moved lower after President Donald Trump suggested the war with Iran, now more than a week old, may conclude “very soon.” The comments helped calm investor nerves, although Iran signaled it is prepared to keep fighting and has reportedly warned it could halt oil shipments through the key Strait of Hormuz. Meanwhile, cloud-computing group Oracle (NYSE:ORCL) is set to publish its latest quarterly results after the U.S. market close.
Futures edge higher
U.S. stock index futures rose as investors reacted to signs that the conflict in Iran might be approaching an end.
By 04:11 ET, Dow futures were up 140 points, or 0.3%. S&P 500 futures climbed 25 points, or 0.4%, while Nasdaq 100 futures advanced 127 points, or 0.5%.
Wall Street’s main indices experienced sharp swings on Monday as markets reacted to developments in the joint U.S.–Israeli military campaign against Iran.
Early in the session, stocks slid, oil prices surged and bond yields jumped after Mojtaba Khamenei was named Iran’s next supreme leader — a decision Trump labeled unacceptable. Mojtaba Khamenei is the son of former leader Ayatollah Ali Khamenei, reinforcing expectations that Tehran’s leadership would maintain its hardline stance despite pressure from U.S. and Israeli airstrikes.
Concerns about a prolonged conflict in the Middle East and the potential disruption of vital oil supplies intensified, raising fears that a surge in global inflation could delay central bank interest-rate cuts and slow economic growth.
Markets later stabilized. Stocks rebounded, oil prices retreated and bond yields eased after Trump said in an interview that the U.S. campaign against Iran was “very complete, pretty much.” By the end of the volatile session, all three major U.S. indices finished in positive territory.
“[I]nvestors remain more concerned about missing the rally that will likely accompany the first sign of de-escalation from the White House than they are about being caught long in the event of a further deterioration in Middle Eastern conditions,” analysts at Vital Knowledge wrote in a note to clients.
Trump says Iran conflict over “very soon”
Later, Trump said the conflict could end “very soon,” telling reporters that “major strides toward completing our military objective” were underway.
He also described the U.S. and Israeli strikes on Iran as a “tremendous success right now.”
At the same time, the White House message remained cautious. Trump noted that the United States “could go further, and we’re going to go further.”
He specifically warned that he would target Iran’s leader if Tehran failed to comply with Washington’s demands. Trump also threatened further military action if Iran attempted to block oil shipments through the Strait of Hormuz — the strategic passage through which roughly one-fifth of the world’s crude supply travels.
Iranian officials have reportedly responded by warning that not “one liter of oil” would be allowed through the strait if the U.S. and Israel continue their military campaign.
Oil prices fall
Crude prices declined on Tuesday, extending losses after a volatile session in which Trump also highlighted steps aimed at easing supply disruptions.
Oil did recover some intraday losses as uncertainty remained over when the conflict might actually end and Tehran’s stance on de-escalation kept markets cautious.
Trump also suggested the possibility of granting certain waivers on oil exports from sanctioned producers — particularly Russia — to offset supply disruptions in the Middle East. Reports also indicated that the Group of Seven nations are considering releasing emergency oil reserves to stabilize the global market.
By 04:39 ET, Brent crude futures had dropped 7.3% to $91.77 per barrel, while West Texas Intermediate futures were down 6.1% at $85.93 per barrel.
Oil prices had surged as high as $120 per barrel on Monday following U.S. and Israeli strikes on several Iranian energy facilities, marking a new escalation in the conflict.
Gold rises
Gold prices moved higher but remained within a narrow range as investors waited for clearer signals regarding the U.S.–Israel conflict with Iran.
The precious metal gained as risk appetite improved following Trump’s comments about a possible end to the fighting and measures aimed at easing oil supply concerns.
However, gold continued to trade within the roughly $5,000 to $5,200 per ounce range seen over the past week as markets weighed ongoing economic uncertainty.
Demand for gold has been partly restrained by fears that higher oil prices could stoke inflation, potentially prompting central banks to maintain tighter monetary policy and strengthening the U.S. dollar — factors that typically make gold more expensive for international buyers.
The dollar edged slightly lower on Tuesday, suggesting that inflation worries may be easing.
Oracle earnings in focus
In corporate news, Oracle will report quarterly results after the closing bell on Wall Street.
Once seen as a relatively smaller player in the cloud computing sector, Oracle has gained prominence thanks to its partnership with OpenAI, which relies on the company’s infrastructure to support artificial intelligence models.
However, investors have grown increasingly cautious about how Oracle intends to finance the massive investment required to build data centers for OpenAI and other major clients, including Facebook-owner Meta Platforms. In December, the company said it expects capital expenditures to reach $50 billion during the current fiscal year, up from an earlier estimate of $35 billion.
To manage these costs, Oracle is reportedly considering cutting thousands of jobs, according to Bloomberg News. The outlet also reported that Oracle and OpenAI have abandoned plans to expand a large AI data center in Texas due to prolonged financing discussions.
Oracle shares, which peaked at around $328 in September, were trading at $151.56 ahead of Monday’s U.S. session. The stock has fallen more than 22% so far this year.
“[S]entiment is still very cautious around Oracle,” the Vital Knowledge analysts said.