S&P 500 futures declined early Tuesday following a rebound in the major averages, attributed to easing oil prices. S&P 500 futures experienced a decline of 0.3%, whereas Nasdaq 100 futures saw a decrease of 0.4%. Futures associated with the Dow Jones Industrial Average declined by 117 points, representing a decrease of 0.3%. Fluctuating oil prices and the repercussions of the U.S.-Iran conflict persist in shaping investor sentiment. On Tuesday morning, oil prices surged by 4%, propelling the global benchmark Brent crude above the $100 threshold once again.
The decline in oil prices observed the prior day facilitated a recovery in Wall Street’s principal indices during Monday’s trading session. The S&P 500 experienced a 1% increase, following a closure last week at its lowest point of the year, influenced by the ongoing U.S.-Iran conflict. The Dow increased by approximately 388 points, representing a rise of 0.8%, while the Nasdaq Composite, known for its technology focus, saw an uptick of 1.2%. All 11 sectors of the S&P concluded the day with positive performance, with technology leading the way in gains. Nvidia shares advanced approximately 1.7% following CEO Jensen Huang’s remarks at the company’s annual GTC conference, where he projected $1 trillion in orders for Nvidia’s Blackwell and Vera Rubin systems by 2027.
Oil prices have surged since the onset of the U.S.-Israel attacks on Iran, driven by concerns that an extended closure of the Strait of Hormuz may result in a global disruption of energy supplies. While Treasury Secretary Scott Bessent informed that the U.S. is permitting Iranian oil tankers to navigate the critical waterway, President Donald Trump indicated on Monday that a coalition to escort tankers through the strait remains in the planning stages. Market participants are closely monitoring ongoing developments related to the conflict. Numerous analysts attribute the ongoing momentum in the stock market to a robust economy, stable inflation, and solid earnings. However, Holly Mazzocca remarked on Monday that “risks to that growth story are mounting.”
“We entered this year with a robust foundation; however, the labor market has notably deteriorated.” Thus, the pressing inquiry for investors at this juncture is to acknowledge that the overarching risks to the sustained growth narrative have escalated compared to just a few weeks prior,” Mazzocca remarked. On the earnings front, Lululemon, Docusign, and Oklo are anticipated to release their results on Tuesday. In a separate development, market participants are anticipating the second Federal Reserve interest rate decision of the year, set to take place on Wednesday. Expectations for rate cuts have lessened as concerns regarding inflation have intensified since the onset of the Iran war, as indicated by CME Group’s FedWatch tool.