US stock index futures rebounded during European hours on Monday, with Dow Jones futures trading around 46,660 (+0.06%), S&P 500 at 6,620 (+0.03%), and Nasdaq 100 at 24,260 (+0.17%) [1]. This recovery followed reports that the United States, Iran, and regional mediators are discussing terms for a potential 45-day ceasefire in the Middle East, although unnamed sources cited by Axios see low chances of a deal being reached within the next 48 hours [1][2].
US President Donald Trump issued a new ultimatum to Iran, threatening strikes on power plants and other civilian infrastructure if the Strait of Hormuz is not reopened, setting a deadline for Tuesday at 8 PM Eastern Time [1][2]. Tehran rejected the ultimatum and warned of a 'much more devastating' retaliation if the US proceeds with its threats [2].
Market sentiment remains cautious, with US equities facing potential headwinds as traders increasingly price in a delay to US Federal Reserve rate cuts due to persistent inflation concerns [1]. The US Dollar Index fluctuated in a tight channel above 100.00 after gains on Thursday and Friday, while crude oil prices corrected lower, with West Texas Intermediate trading at around $103 per barrel after a more than 10% surge last Thursday [2].
On the economic front, the US Bureau of Labor Statistics reported that Nonfarm Payrolls rose by 178,000 in March, beating expectations of a 60,000 increase and following a revised February decline of 133,000. The Unemployment Rate edged lower to 4.3% from 4.4%, while the Labor Force Participation Rate fell to 61.9% from 62%. Annual wage inflation softened to 3.5% from 3.8% [2]. Investors are now focused on the upcoming Federal Open Market Committee (FOMC) Meeting Minutes for further policy guidance [1].
CONCLUSION
US markets are reacting to heightened geopolitical tensions and ongoing ceasefire negotiations between the US and Iran, with volatility driven by President Trump's ultimatum and Iran's response. While equities have rebounded on hopes of a ceasefire, persistent inflation and delayed Fed rate cuts continue to weigh on sentiment. Investors remain cautious, awaiting further clarity from both geopolitical developments and upcoming Fed communications.