Wall Street rally ahead? Dow futures jump nearly 500 points on Trump’s reported plans to exit Iran war

Synopsis

US stock futures surged after reports suggested Donald Trump may seek to end the Iran conflict, easing investor concerns over prolonged geopolitical tensions. Gains in Dow, Nasdaq and S&P futures come amid stable oil prices and falling bond yields, although uncertainty remains due to ongoing risks in the Strait of Hormuz.

US stock market futures gained sharply on Tuesday, with Dow Jones futures surging more than 465 points after a report said that US President Donald Trump is willing to end the war with Iran even if the Strait of Hormuz remains largely closed.

Trump told his aides that he is willing to end the war even if a large part of operations through the Strait of Hormuz remains closed and is set to open at a later date, the Wall Street Journal reported on Monday, citing administration officials. This comes as the war has entered its fifth week, leading economists to worry about the impact on the economy.

Dow Jones futures gained more than 1% (over 465 points) to 45,681, as seen at around 11.15 am IST on Tuesday. Nasdaq 100 futures gained over 186 points and S&P 500 futures rose 54 points.

This comes a day after Wall Street indices remained mixed on Monday. The Dow Jones Industrial Average rose 0.11%, the S&P 500 fell 0.39% to 6,344, and the Nasdaq Composite declined 0.73% to 20,795.

Oil futures remained nearly flat on Tuesday morning. Brent crude futures fell marginally to $112.7 per barrel, a day after reaching their highest levels since March 19. WTI crude, meanwhile, dropped to $102.6 per barrel. This came along with a decline in bond yields after a sharp surge earlier.

The fall in US bond yields comes after Federal Reserve Chair Jerome Powell said on Monday that longer-run inflation expectations appear to be "well anchored" despite soaring oil prices. This led to investor expectations that the Fed is likely to be in no rush to cut or hike interest rates.

All is well?

The rise in Wall Street futures accompanies gains in GIFT Nifty as well. However, some caution is warranted. Donald Trump said the US will blow up Iran if a ceasefire deal is not reached soon. “Great progress has been made but, if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately 'Open for Business', we 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 desalinisation plants!),” Trump posted on Truth Social.

(With inputs from Reuters)

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