US equity futures climbed significantly Monday morning, buoyed by a sharp decline in crude oil prices. The S&P 500 futures rose 0.8%, Nasdaq 100 futures jumped 1.4%, and Dow futures gained roughly 400 points ahead of market open. This turnaround follows a turbulent week marked by rising energy costs and geopolitical tension in the Middle East.
Brent crude prices fell 5% to $87.13 per barrel, while West Texas Intermediate dropped 5.5% to $84.37. The steep selloff came after reports surfaced that President Trump has put a temporary hold on airstrikes against Iran, opening a window for diplomatic talks. According to Kathleen Brooks, research director at XTB, this development "dramatically reduced the geopolitical risk premium," which had been weighing heavily on markets.
Declining oil prices also helped push down Treasury yields, with the 10-year yield slipping 4 basis points to 4.64%, easing some inflation fears. Investors now await the Federal Reserve’s policy announcement scheduled for Wednesday, where the consensus remains split: a 66% chance of holding rates steady versus 34% probability of a hike, based on CME FedWatch data.
Meanwhile, tech giants like Microsoft, Meta, Apple, and Amazon are set to release their quarterly earnings this week. Market watchers will closely analyze these reports for signs on the durability of AI-related investments, which have been a key driver of recent market momentum.
