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US stock index futures climbed on Tuesday after a report signaled potential de-escalation in the Iran conflict, easing pressure on a market that has been sliding through March.
The Wall Street Journal reported that President Donald Trump told aides he was willing to end the military campaign against Iran even if the Strait of Hormuz remained largely closed.
5 things to know before Wall Street opens
1. S&P 500 futures were up 0.87% on Tuesday, while Nasdaq 100 futures gaining 0.86%.
Dow futures rose sharply by 432 points, or 0.95%.
The S&P 500 and the Dow are on track for their biggest monthly declines since September 2022 after a month-long conflict rattled risk appetite.
2.Oil prices were volatile on Tuesday but were headed for a record monthly gain.
The S&P 500 energy index has gained over 11% so far in March and is the only sector set to finish the month in positive territory.
The Dow and the Nasdaq last week ended 10% below their record high closes, confirming a correction.
The small-cap Russell 2000 confirmed a correction earlier this month.
3. Traders will parse the February job openings and labor turnover survey later in a holiday-shortened week.
Comments from Federal Reserve officials Austan Goolsbee and Michelle Bowman are also due, after Chair Jerome Powell said on Monday the Fed can wait to assess the impact from the war.
4. The oil spike has revived inflation concerns, and money market participants have priced out any Federal Reserve easing this year, compared with two cuts expected before the war broke out, per CME Group’s FedWatch Tool cited by Reuters.
BNP Paribas economist Isabella Mateos Y Lago said investors were not expecting the war to cause meaningful damage to growth, with many analysts sticking to pre-war end-2026 US index targets and making few earnings downgrades, while cash holdings remain below levels seen around Trump’s tariff announcement.
“As long as the possibility of scenarios that inflict only manageable growth costs persists, it is preferable that financial markets do not amplify headwinds from higher energy prices and more hawkish central banks,” she said in comments reported by Reuters.
5. McCormick shares rose 4.2% after Unilever said it was in advanced talks to combine its food business with the spice maker.
Emerson Electric gained 2.2% after Jefferies assumed coverage with a buy rating.
Signs of potential de-escalation in the Middle East have provided a lift to US futures, but the month’s damage remains, with major indexes headed for their worst March since September 2022 and oil-driven inflation risks still in focus.
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