Markets Shake Off Middle East Jitters? Nasdaq, S&P 500 Futures Rise As Strategist Sees ‘Transient’ Geopolitical Risk, Twin Tailwinds

U.S. stocks look poised to extend the winning run on Tuesday as futures traded moderately higher in the Asian session. The positive sentiment came on the back of indications that the Iran-Israel standoff would end.

President Donald Trump said in a Truth Social post, “It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE” in about six hours from the time of his posting (6:02 p.m. ET), lasting through 12 hours. At that point, the war will be considered ended, he said.

The claim, however, was countered by Iran’s Foreign Minister Seyed Abbas Araghchi, who said on X that “As of now, there is NO ‘agreement’ on any ceasefire or cessation of military operations.”

He left open the scope for a potential resolution by adding that if Israel stops its “illegal aggression” no later than 4 a.m. Tehran time (8:30 p.m. ET on Monday), Iran has no intention to continue its response afterwards. 

“The final decision on the cessation of our military operations will be made later,” he added.

The skirmish continued with Al Jazeera reporting that Iran attacked the Al Udeid U.S. Air Base in Qatar, but Qatari officials said the missiles were successfully intercepted.

As of 12:33 a.m. ET on Tuesday, the Nasdaq 100 and the Russell 2000 futures climbed about 0.80%, while the S&P 500 and Dow futures were up about 0.50%.

On Monday, stocks ignored the escalation in Middle East tensions following the U.S. bombing of Iran’s nuclear sites and advanced solidly. Fund manager Louis Navellier called it a “relief rally” as the uncertainty had been removed. He, however, cautioned that any relief rally could end abruptly if the fighting spins out of control and there are endless retaliatory strikes.

Traders also welcomed a drop in oil prices as well as better-than-expected flash private sector activity data and an unexpected increase in existing home sales.

The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) rallied 1.03% and 0.99%, respectively.
 

The SPDR Dow Jones Industrial Average ETF Trust (DIA) added 0.94%, while the iShares Russell 2000 ETF (IWM) jumped 1.22%.

On Tuesday, the spotlight will likely be on Federal Reserve Chair Jerome Powell’s semi-annual monetary policy testimony before the House Financial Services Committee. Given the Trump administration's animosity toward him, his testimony assumes importance.

Cleveland Fed President Beth Hammack is scheduled to speak at 9:15 a.m. ET.

Also on tap are a pair of house prices reports, due at 9:15 a.m. ET, and the Conference Board’s consumer confidence data for June.

Carnival (CCL), BlackBerry (BB), FedEx (FDX), AeroVironment (AVAV) and Worthington Enterprises (WOR) are among those announcing their quarterly results on Tuesday.

Morgan Stanley’s Equity Strategist shrugged off the impact of Middle-East tensions. The strategist said, “History suggests most geopolitically-led sell-offs are short-lived/modest,” but cautioned that oil prices will determine whether volatility persists.

Wilson said, “We're still focused on EPS momentum and positive operating leverage as tailwinds for stocks.”

Crude oil futures extended their slide in the Asian hours, and gold futures also fell about a percent. The 10-year U.S. Treasury note rebounded slightly, while the dollar lost ground.

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