U.S. stock futures are pointing to a higher open on Monday, suggesting equities may recover some of the ground lost during last week’s sharp sell-off.
Early gains could be driven by bargain hunting, as some investors take advantage of lower valuations following the recent market weakness.
The downturn last week pushed the major U.S. indices to their lowest closing levels in more than eight months.
Investor sentiment may also be supported by upbeat remarks from President Donald Trump regarding the conflict in the Middle East.
In a post on Truth Social earlier today, Trump said the United States had made “great progress” in talks with a “new, and more reasonable, regime” aimed at ending military operations in Iran.
At the same time, Trump cautioned that if an agreement is not reached soon, the United States will “conclude our lovely ‘stay’ in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!)”.
However, gains could be limited as crude oil prices continue to rise amid ongoing concerns about the broader economic impact of the Middle East conflict.
Stocks declined sharply throughout Friday’s session, extending losses from the previous day. The major indices moved lower early in the trading session and deepened their declines as the day progressed.
Although the market recovered somewhat from its intraday lows by the close, the main averages still recorded notable losses. The Nasdaq dropped 459.72 points, or 2.2%, to finish at 20,948.36, the Dow fell 793.47 points, or 1.7%, to 45,166.64, and the S&P 500 lost 108.31 points, or 1.7%, closing at 6,368.85.
For the week overall, the Nasdaq slid 3.2%, the S&P 500 declined 2.1%, and the Dow dropped 0.9%. These declines left the major indices at their lowest closing levels in more than eight months.
A continued surge in oil prices weighed heavily on markets. Brent crude futures climbed back above $110 per barrel after jumping more than 5% during Thursday’s trading session.
The sustained increase in oil prices occurred despite President Trump extending the pause on potential attacks against Iran’s energy infrastructure by 10 days, pushing the deadline to April 6.
Trump said in another Truth Social post that negotiations with Iran were “going very well,” though Iranian state media reported that Tehran had “responded negatively” to a U.S. peace proposal.
“Comments from Washington and Tehran about a potential peace process seem to come from parallel worlds, with the former indicating talks are going well while the latter effectively denies talks are even happening,” said AJ Bell investment director Russ Mould.
“For now, fighting continues and the path out of the current crisis remains unclear,” he added. “Oil prices, probably the best indicator, remain elevated and have reached $110 per barrel again.”
Mould also warned that if crude prices remain elevated for an extended period, concerns about inflation returning could intensify.
Airline stocks were among the hardest hit during Friday’s trading, with the NYSE Arca Airline Index plunging 4.7%.
Biotechnology, software and computer hardware stocks also recorded significant declines, contributing to the steep losses in the technology-heavy Nasdaq.
Financial, retail and healthcare stocks also moved sharply lower, while gold mining shares bucked the broader market downturn as the price of gold surged.