US stock futures were largely flat late Monday, pausing after a sharp rebound on Wall Street that was driven by growing optimism around a potential easing of tensions between Washington and Tehran.
Contracts linked to the S&P 500 (ES=F) slid 0.6% while Dow Jones Industrial Average (YM=F) fell 0.5%. Nasdaq 100 futures (NQ=F) dropped 0.7%.
Markets rose Monday after President Trump said the US had engaged in “very good and productive” discussions with Iran aimed at resolving hostilities. However, Iranian state media pushed back on the claim, stating that no direct negotiations had taken place. Markets initially reacted enthusiastically, with the Dow (^DJI) at one point soaring more than 1,100 points intraday.
The developments followed a tense weekend, during which Trump warned of potential strikes on Iranian energy infrastructure if the Strait of Hormuz was not opened. Iran responded with threats targeting US assets, raising concerns about further escalation.
Oil prices retreated sharply on the news of hostilities potentially winding down. West Texas Intermediate (CL=F) crude dropped roughly 10% to settle near $88 per barrel, while Brent (BZ=F) crude fell close to 11%, ending just under $100. Oil futures rose slightly in late trading.
Looking forward, investors will turn their attention to upcoming US manufacturing data due Tuesday morning, as well as eyeing the end of earnings season, with GameStop (GME) due to report after the close.
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