U.S. stock futures are signaling a strong start for markets on Tuesday, suggesting equities may open sharply higher after retreating later in the previous session.
Early gains could be fueled by reports that President Donald Trump is considering bringing the conflict in the Middle East to a close.
According to a Wall Street Journal report, Trump told advisers he would be prepared to end the U.S. military campaign against Iran even if the Strait of Hormuz remains largely blocked.
Administration officials cited by the WSJ said Trump and his team concluded that a military effort to reopen the strait would likely stretch the conflict well beyond his preferred four-to-six-week timeline.
Those officials told the newspaper that Washington would first seek to pressure Tehran diplomatically to restore shipping through the waterway. If that fails, the administration would look to regional allies to take a more active role.
Trump appeared to reinforce the report in a Truth Social post Tuesday morning urging allies to “build up some delayed courage, go to the Strait, and just TAKE IT.”
“You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us,” Trump said. “Iran has been, essentially, decimated. The hard part is done. Go get your own oil!”
Stocks had opened Monday with strong gains but lost momentum throughout the day. Major indexes retreated from their intraday highs, leaving the Nasdaq and S&P 500 in negative territory by the close.
The Nasdaq dropped 153.72 points, or 0.7%, to finish at 20,794.64, while the S&P 500 declined 25.13 points, or 0.4%, ending at 6,343.72—both posting their lowest closing levels in nearly eight months.
The Dow Jones Industrial Average was the exception, edging up 49.50 points, or 0.1%, to 45,216.14 after briefly slipping into negative territory during the final hour of trading.
Early strength in Monday’s session was partly driven by bargain hunting, as some investors moved to buy stocks following recent declines.
Optimistic remarks from President Trump about developments in the Middle East also helped support early buying.
In a Truth Social post, 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.
However, he warned that if negotiations fail, the U.S. would “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!)”
Investor enthusiasm faded as the session progressed, however, as oil prices continued climbing amid concerns about disruptions tied to the Middle East conflict.
U.S. crude oil futures surged more than 3% during the day, finishing above $100 per barrel for the first time since July 2022.
Semiconductor stocks were among the biggest losers, pulling the Philadelphia Semiconductor Index down 4.2% to its lowest closing level in nearly three months.
Computer hardware and networking stocks also weakened significantly, weighing heavily on the tech-focused Nasdaq.
Despite the sharp rise in crude prices, oil services companies also declined, with the Philadelphia Oil Service Index dropping 3.3%.
Airline shares were another weak spot in the market, while biotechnology and pharmaceutical stocks posted solid gains.