US stock futures climbed Monday morning after reports emerged that the United States and Iran had agreed to stop attacking each other, at least for now. Futures linked to the S&P 500 climbed 0.5%, Nasdaq 100 futures rose 0.6%, and contracts tied to the Dow Jones Industrial Average inched up 0.3%.
The market gains came after a brutal week. According to Yahoo Finance, the S&P 500 and Nasdaq Composite fell nearly 2% and 4.6% last week. Nvidia and Alphabet each dropped more than 8%, while Meta, Apple, and Amazon declined more than 4%. SpaceX shares plunged 17%.
The violence that rattled markets began when a commercial tanker in the Strait of Hormuz, the Panamanian-flagged M/T Kiku, was struck by a projectile on Saturday. The ship was carrying more than two million barrels of crude oil. US Central Command said early Sunday that fighter jets struck 10 Iranian military targets in and near the strait in retaliation.
President Donald Trump announced the strikes on Truth Social, writing that "United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN!"
Trump also escalated his rhetoric against Iran in the same post, warning that "There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist!"
Iran said it struck US military targets in Kuwait and Bahrain in response. Both countries reported incoming missiles and drones overnight.
Talks to end the conflict were reported to be on hold following the exchange of fire. A Pakistani source involved in the negotiations told MS NOW that while the talks are paused, all sides are maintaining representatives in Switzerland to restart discussions when given the go-ahead. The source did not make clear which side decided to pause negotiations.
A senior Trump administration official pushed back on that characterization. "Nothing has been cancelled," the official said in a statement to MS NOW. "Technical talks regarding the implementation of [memorandum of understanding] are on track for the coming days as planned."
Axios later reported that the US and Iran had agreed to stop attacking each other and meet later this week. CNBC reported it had not independently confirmed the Axios account. A US official later told CNBC that "Technical talks are slated to continue on all areas of the MOU" and that "Both sides will stand down for now and vessels can move freely."
Oil prices moved higher in early trading as investors weighed the risk of further supply disruptions. Brent crude gained 0.8% to $72 a barrel, while US West Texas Intermediate crude rose 1.1% to $70, according to Yahoo Finance. MarketWatch reported that fears the Strait of Hormuz may effectively be shut again drove the early moves in both oil and equity futures.
The Dow Jones Industrial Average outperformed other indexes last week, rising 0.6% as healthcare stocks provided support. Merck climbed 13% during the week, while Johnson and Johnson gained 11.5%.
Because of the July 4 holiday, the June jobs report will be released Thursday rather than Friday.
Trump has threatened Iran repeatedly over the course of the conflict. In an April Truth Social post, he wrote that "a whole civilization will die tonight" and raised the specter of nuclear war. In May he wrote, "For Iran, the Clock is Ticking, and they better get moving, FAST, or there won't be anything left of them."
Technical talks are slated to continue in the coming days, with representatives from both sides still present in Switzerland.
