S&P 500, Dow, Nasdaq Futures Climb As US, Iran Reportedly Agree To Pause Further Escalation: SLS, WEN, MSTR, WDC Stocks In Focus

• U.S. stock futures climbed higher on the news after markets ended lower on Friday. 
• Oil prices climbed higher on fears of renewed Middle East tensions. 
• The non-farm payroll report for June and the ISM Manufacturing PMI are among the top economic releases markets will be watching this week.

U.S. stock futures edged higher in the overnight session on Sunday, following reports that the U.S. and Iran have agreed to pause the exchange of strikes that escalated over the weekend and plan to meet Tuesday in Qatar to resume talks.

Fresh tensions broke out between the two nations after Tehran assumed responsibility for some attacks on commercial ships in the Strait of Hormuz on Thursday.

S&P 500 futures gained 0.45%, Dow futures were up 0.22%, and the Nasdaq 100 futures climbed 0.43% at 9:08 PM EDT.  

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY), the Invesco QQQ Trust (QQQ) and the SPDR Dow Jones Industrial Average ETF Trust (DIA) all traded higher at the time of writing.

The iShares 20+ Year Treasury Bond ETF (TLT) was trading down 0.15% amid ‘bullish’ sentiment.

How Did US Markets Fare Last Week?

U.S. stock markets had a mixed week ending Friday as investors rotated out of technology stocks and into other industries. The Dow Jones Industrial Average, which is less exposed to tech, climbed about 0.62% at the end of the week. Meanwhile, the S&P 500 and Nasdaq indexes shed 1.95% and 4.48%, respectively.

On Friday, all three benchmark indexes closed lower. The Dow shed about 60 points to close 0.09% down, the S&P 500 declined 0.05%, and the Nasdaq was also 0.24% lower at close.

US Market Drivers

Geopolitical tensions are back at the forefront after the U.S. and Iran exchanged fresh fire last week, reigniting fears of renewed tensions in the Strait of Hormuz and constrained energy supplies.

The conflict intensified since Thursday when Iran targeted a container ship, an oil vessel carrying Qatari crude, and military bases in Kuwait and Bahrain, triggering multiple U.S. retaliatory attacks.

“United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN! It is very possible that they will never learn!” U.S. President Donald Trump said in a Truth Social post late Saturday.

“There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist!” he added.

The comments come just about 10 days after the two countries signed a ceasefire in Switzerland to end the conflict that has stretched on since the end of February.

Meanwhile, according to an Axios report from Sunday, Washington and Tehran have agreed to halt attacks and will meet on Tuesday in Qatar's capital to renegotiate terms following the dispute.

"We decided to stop all the kinetic activity," a senior U.S. official reportedly told Axios, indicating a pause in the military strikes. The report also stated that another official said that both countries will stand down "for now" and that "vessels can move freely" through the Strait as talks resume.

“Investors see the exchange of attacks between the US and Iran as temporary and do not believe the situation will escalate into another war,” Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab, reportedly told Bloomberg.

Jim Chanos, the founder of Kynikos Associates, said in a post on X that “It’s literally the same story leaked every Sunday afternoon.”

Meanwhile, markets will be watching several key U.S. economic releases this week. The non-farm payroll (NFP) report for June and the ISM Manufacturing PMI are among the top releases expected.

The annual central banker confab in Sintra, Portugal, officially known as the ECB Forum on Central Banking, is also scheduled for the week, with Federal Reserve Chair Kevin Warsh expected to speak.

U.S. stock and bond markets will be closed on Friday, July 3, in observance of Independence Day.

Trending Stocks To Watch

Sellas Life Sciences Group (SLS): The stock continued to attract attention from retail traders over the weekend as short interest hit an all-time high last week, while investors weighed acquisition speculation sparked by revisions in executive severance terms.

Wendy's Co. (WEN): The fast food chain clocked the best weekly gains in more than six years even as retail traders actively discussed the company’s potential turnaround story.

Strategy (MSTR): The Bitcoin treasury company is facing growing scrutiny after its market-value-to-net-asset-value ratio fell below 1 for the first time over the weekend, with analysts arguing that this breaks the premium that powered its Bitcoin-buying model.

Western Digital Corp. (WDC): The memory company slid more than 13% at close on Friday, making it one of the largest casualties of the rotation out of AI-linked names last week.

Global Market Trends

Crude oil prices were climbing late Sunday over the latest developments in the Middle East. At the time of writing, Brent crude futures expiring in August were trading 0.92% higher at around $72.65 per barrel. Meanwhile, WTI crude futures expiring in August climbed about 1% to $69.92 per barrel.

Yields on the 10-year Treasury were at 4.386% at the time of writing, while spot gold prices declined to around $4,056.84 an ounce.

Asian markets traded mixed at the open on Monday. South Korea's KOSPI, Japan’s Nikkei 225, and China’s SSE Composite index edged lower. Meanwhile, Australian stocks climbed higher at the open.

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