S&P 500 futures slipped Monday as doubts grew over a lasting U.S.-Iran deal to reopen the Strait of Hormuz, even as the index sits near a record close. Oil prices rose on the uncertainty, while traders also braced for this week's consumer inflation data and Cisco and Applied Materials earnings.
Futures tied to the S&P 500 fell 0.1% on Monday, while Nasdaq-100 futures declined 0.2% and Dow Jones Industrial Average futures dropped 120 points, also 0.2%. The moves came amid growing doubts that the United States and Iran will reach a lasting resolution to their conflict soon.
Iran holds out on direct Hormuz talks
Iran said Sunday it is closing in on a deal with Oman to reopen the Strait of Hormuz, though Tehran continues to resist direct negotiations with the U.S. until several conditions are met. Iranian Foreign Minister Abbas Araghchi said Sunday there was "no possibility of restarting negotiations" as long as the U.S. keeps violating the June memorandum of understanding, according to Tasnim News Agency.
President Donald Trump told Axios on Sunday that the U.S. was only semi-negotiating with Iran and wants the country to feel economic pressure. Iran also said Sunday it was close to a final agreement with Oman on new shipping lanes through the strait, though it repeated that Washington must meet several conditions before the waterway reopens.
Oil prices climbed as the Hormuz uncertainty persisted, with U.S. West Texas Intermediate crude up 1% near $79 a barrel and Brent crude also up 1% near $84. Last week, Treasury Secretary Scott Bessent's comments had signaled a deal was imminent.
Rate-hike bets ease after jobs miss
Stocks got a lift Friday after the July nonfarm payrolls report showed an unexpected contraction, raising hopes the Federal Reserve will hold off on rate hikes. Fed funds futures now price a 44% chance of a September rate increase, down from 67% a week earlier, according to CME's FedWatch tool.
Investors are watching consumer and producer price index readings due this week for fresh clues on inflation. Economists polled by Reuters expect the consumer price index to have risen 3.4% year-on-year, down from 3.5% the prior month.
S&P 500 holds near record after best week since April
The three major U.S. indexes are coming off their best week since April. The S&P 500 finished last week at an all-time closing record, closing at 7,757.64, up 47.68 points, or 0.62%. The run has lifted the index's yearly gain to over 13%, with strong earnings from AI-linked companies offsetting concerns about heavy spending.
Of the S&P 500 companies that have reported second-quarter results, 85.1% beat analysts' expectations, well above the 67% beat rate typical since 1994. Asia-Pacific markets closed broadly higher Monday, tracking Friday's U.S. gains, with Japan's Nikkei 225 adding 2.1% to close at 66,970 and Hong Kong's Hang Seng index up 1%.
Sources: CNBC, Reuters via Yahoo Finance, Reuters via Investing.com
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