US pre-open: Futures rise as oil falls, diplomatic hopes lift sentiment

(Sharecast News) - Wall Street futures were in the green ahead of the open on Tuesday as oil prices fell and hopes grew that negotiations to end the US and Israel's conflict with Iran were making progress.

As of 1245 BST, Dow Jones futures were up 0.58%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.67% and 0.99% firmer, respectively.

The Dow closed 294.04 points higher on Friday and was closed for trading on Monday in observance of the Memorial Day holiday.

Donald Trump said talks were "proceeding nicely", though he warned the US could resume offensive operations if discussions broke down. Crude prices retreated sharply following his comments, with West Texas Intermediate futures down 4.19% at $92.55 a barrel.

Even so, with oil still elevated and inflation pressures persistent, expectations for looser Federal Reserve policy remained muted, with traders now pricing in an 8.5% chance of a July rate hike, up from 0.9% a month earlier.

The US also later confirmed it had carried out new strikes on southern Iran, targeting missile sites and boats allegedly attempting to lay mines. US Central Command said the actions were taken in "self‑defence" to protect American forces, adding that the military continued to show restraint during the ongoing ceasefire.

Iran has yet to respond publicly, though a foreign ministry spokesman earlier said that while progress had been made in talks, a deal "is not imminent". It remains unclear how the latest strikes will affect the prospects for a peace agreement.

On the macro front, the Chicago Federal Reserve's April national activity index will be published at 1330 BST, while S&P/Case-Shiller's March home price index was slated for release at 1400 BST, May consumer confidence figures will be on deck at 1500 BST, and the Dallas Fed's May manufacturing index will follow at 1530 BST.

No major corporate earnings were slated for release on Tuesday.

Reporting by Iain Gilbert at Sharecast.com