Key Takeaways

• Futures recover: S&P 500 futures fell 0.14% to 7,560.25 after initially tumbling as much as 1% on Iran strike fears.
• Nasdaq 100 flat: At 30,716; Dow futures slightly lower at 51,996.
• Markets closed Friday: Wall Street observed the Juneteenth holiday.
• Iran touts “major progress”: FM Araghchi cited significant advances in Switzerland talks, particularly on ending the Lebanon war.
• Pakistan and Qatar optimistic: Both mediators flagged “encouraging progress” and confirmed more technical discussions are committed for coming days.
• Trump’s Sunday threat: The president warned he would attack Iran if it didn’t stop Hezbollah from “causing trouble” in Lebanon.
• Hezbollah the sticking point: Israel’s bitter conflict with the group in southern Lebanon remains the central obstacle in peace efforts.
• Prior Thursday’s gains: S&P 500 rose 0.55%, Nasdaq Composite jumped 1.9%, and Dow gained 0.1% — all near recent record highs.
• AI trade remains dominant: Chipmaking stocks and megacap tech continue to routinely propel benchmarks to historic highs despite Middle East volatility.
• Blockbuster IPO wave: A string of major public offerings has added further market momentum.
• Higher-for-longer reality sets in: Wall Street’s choppy performance reflects the ongoing repricing of rate expectations following the Fed’s hawkish meeting.
• PMI and GDP data due: Purchasing managers index and revised Q1 GDP figures expected in the coming days.
• PCE the week’s pivotal release: The Fed’s preferred inflation gauge will serve as a litmus test for rate hike expectations — a cool reading would offer relief; a hot print would accelerate tightening bets.

U.S. stock index futures steadied on Monday, reversing initial losses after Iran flagged some progress in weekend peace talks held in Switzerland.

Futures had initially tumbled as much as 1% on fears of heightened tensions with Iran after President Donald Trump threatened more strikes against the country over continued hostilities between Israel and Hezbollah.

S&P 500 futures fell 0.14% to 7,560.25 points by 06:47 ET. Nasdaq 100 futures were flat at 30,716 points, while Dow Jones futures fell slightly to 51,996 points.

Markets were closed for the Juneteenth holiday on Friday.

Iran Touts Progress in Switzerland Talks; More Negotiations on Tap

Iran’s Foreign Minister Abbas Araghchi touted “major progress” in talks held in Switzerland, especially toward ending the Lebanon war.

Separately, statements from Pakistani and Qatari mediators also flagged “encouraging progress” in U.S.-Iran talks, and both sides committed to more technical discussions in the coming days.

The upbeat comments came after Trump on Sunday threatened to attack Iran if it did not stop Lebanese group Hezbollah — which it backs — from “causing trouble.” Hezbollah’s bitter conflict with Israel in southern Lebanon has been a key point of contention in ongoing peace efforts.

Wall Street Upbeat on Tech Gains; PMIs and PCE Data on Tap

Wall Street clocked a positive close in a holiday-shortened week on Thursday, amid a rally in chipmaking stocks, continued artificial intelligence optimism, and euphoria around the U.S.-Iran framework peace deal.

The S&P 500 rose 0.55%, the Nasdaq Composite jumped 1.9%, and the Dow Jones Industrial Average rose 0.1% — with all three indexes closing in sight of recent record highs.

Investors have capitalized on the secular AI boom, using megacap technology stocks as an offensive growth play that routinely propels benchmarks to historic highs. This structural AI trade, paired with a wave of blockbuster initial public offerings, has given equity markets the momentum to shrug off volatile Middle East headlines.

Key Economic Data This Week

Focus this week will be on a string of U.S. economic readings. Purchasing managers index data for May and a revised first-quarter gross domestic product print are due in the coming days.

Meanwhile, Wall Street’s recent choppy performance reflects a rejigging of interest rate expectations, as central bankers signal a higher-for-longer regime.

Market participants are laser-focused on the upcoming Personal Consumption Expenditures price index figures — the Fed’s preferred inflation metric. The data will serve as a litmus test for near-term rate hike expectations. A cooler-than-expected reading could offer much-needed relief that inflationary pressures are subsiding, while a hot print could further accelerate expectations of policy tightening.