U.S. stock index futures are pointing to a weaker open on Tuesday, suggesting markets may pull back after the strong gains recorded in the previous trading session.
The expected decline comes as crude oil prices rebound, with global benchmark Brent crude futures climbing back above $100 per barrel.
Brent futures had dropped nearly 11% on Monday after President Donald Trump said the United States and Iran had held productive discussions aimed at ending the conflict in the Middle East.
Oil prices are now recovering as hostilities between Israel and Iran continue, with large explosions reported in Tehran and other cities. Iranian officials have denied that any negotiations with the United States took place.
“Iranian people demand complete and remorseful punishment of the aggressors,” Iranian Parliament Speaker Mohammad Bagher Ghalibaf wrote in response to Trump’s comments.
He added that Trump’s latest rhetoric “is used to manipulate the financial and oil markets and escape the quagmire in which the U.S. and Israel are trapped.”
Iran’s foreign ministry also dismissed Trump’s remarks, saying they were “part of efforts to reduce energy prices and buy time” for military plans.
With the conflict now entering its 25th day and no clear signs of de-escalation, Saudi Arabia and the United Arab Emirates are moving closer to joining the fight against Iran, according to a report by the Wall Street Journal.
On Monday, U.S. stocks rallied strongly early in the session before giving up part of their gains later in the day, though the major indices still finished significantly higher. The rebound followed last Friday’s close, when markets had fallen to their lowest levels in several months.
While the main indices ended well below their session highs, they still recorded notable advances. The Dow jumped 631.00 points, or 1.4%, to close at 46,208.47. The Nasdaq rose 299.15 points, or 1.4%, to 21,946.76, and the S&P 500 gained 74.52 points, or 1.2%, finishing at 6,581.00.
The early surge on Wall Street was driven by Trump stepping back from earlier threats to “obliterate” Iran’s power plants if the country failed to fully reopen the Strait of Hormuz.
In a post on Truth Social, Trump said the U.S. and Iran had engaged in “very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East.”
Trump said he subsequently instructed the War Department to delay military strikes on Iran’s power plants and energy infrastructure for five days.
Later, speaking with CNBC’s Joe Kernen, the president said the United States is “very intent on making a deal with Iran,” after previously saying he was not interested in negotiations.
Trump had earlier warned he would “obliterate” Iran’s power plants if the Strait of Hormuz was not reopened within 48 hours.
Iran responded by warning it would target energy and water infrastructure across the Gulf region if the United States carried out the threatened attacks.
However, buying momentum faded as the session progressed after Iranian state media reported that the country’s foreign ministry had denied any negotiations with the United States.
Trump later told reporters that the U.S. was speaking with a “top person” in Iran whom he described as the “most respected,” though he acknowledged that the individual was not the new supreme leader, Mojtaba Khamenei.
Airline stocks were among the strongest performers of the day, with the NYSE Arca Airline Index jumping 4.2% after ending last Friday at its lowest closing level in four months.
Gold mining shares also saw strong gains, with the NYSE Arca Gold Bugs Index climbing 3.4%. The rally occurred despite a sharp decline in the price of gold.
Networking stocks also moved higher, pushing the NYSE Arca Networking Index up by 3%.
Steel, housing, oil service and computer hardware stocks likewise recorded notable gains amid broad-based buying across Wall Street.