Dow Jones futures rose by 0.60% to trade near 52,390 during European hours on Monday, while S&P 500 futures advanced by 0.57% to around 7,760 and Nasdaq 100 futures climbed by 0.86% to near 30,170. The positive movement in US stock futures was attributed to improved market sentiment following a decline in crude oil prices. This drop was linked to increased optimism that diplomatic efforts could help resolve the Middle East conflict and restore stable energy flows from the region [1].
Strategists at Deutsche Bank commented that last week's equity market performance illustrated a pattern likely to persist throughout 2026, noting that rising oil prices previously undermined risk appetite and led to outperformance by defensive, minimum volatility, and value stocks. They suggested this could serve as a template for future market reactions to energy-price shocks [1].
Diplomatic momentum was further boosted by US President Donald Trump's statement that he would "probably" be open to meeting Iranian President Masoud Pezeshkian at the United Nations General Assembly in New York this week. Trump may also meet other Persian Gulf leaders and is scheduled to hold a summit with Chinese President Xi Jinping [1].
Despite the positive tailwinds, traders remained cautious due to hawkish sentiment surrounding the Federal Reserve's policy outlook. Last week, the Fed implemented a 25-basis-point rate hike—its first in three years—to curb inflation and signaled additional increases ahead. The CME FedWatch tool indicated that markets now price in a 53.1% probability of another rate hike at the October meeting, up from 43.5% the prior week. Fed Chair Kevin Warsh emphasized that inflation remains unacceptably high and recent summer readings show no meaningful improvement in underlying trends [1].
CONCLUSION
US stock futures rallied on improved sentiment driven by lower crude oil prices and diplomatic developments, but caution persists due to the Federal Reserve's hawkish stance and ongoing inflation concerns. The market is closely watching upcoming Fed decisions and diplomatic meetings for further direction. Overall, the outlook remains mixed, with positive momentum tempered by policy uncertainty.