Dow Jones and S&P500: Markets Weigh Iran Deal After Record Rally

Futures Hold Steady After Dow Record Close

Tuesday’s premarket trade is flat. Dow futures are up 16 points, and both S&P 500 and Nasdaq 100 futures have barely moved. Monday was the repositioning day. What matters now is whether the money stays where it went.

The Dow climbed 468.77 points, or 0.92%, to both intraday and closing records Monday. The S&P 500 advanced more than 1% and the Nasdaq Composite led with a 3.1% gain. The U.S.-Iran peace framework drove the entire session as every sector bet came down to one question: does this deal hold.

One Headline Wiped Five Weeks of Risk Premium

Five weeks of war premium came out of the oil market in a single session. President Trump announced the U.S. and Iran reached an agreement to end the conflict. Pakistani Prime Minister Shehbaz Sharif confirmed both sides agreed to halt military operations across all fronts. The formal signing is set for Switzerland later this week. Both sides already signed a memorandum of understanding electronically.

The Strait of Hormuz reopening is on the schedule for Friday. That’s the chokepoint for global crude flows and traders priced it in before the details were even public. Oil dropped nearly 5% on Monday. Iranian media is already disputing the toll-free access terms, but the market is trading the headline, not the fine print.

Lower oil rewrites the inflation outlook. If crude stays down here, the Fed has less reason to stay tight. That connection ran through every sector on Monday and it explains why tech rallied as hard as energy sold off.

Nikkei Hit a Record Despite BOJ’s 1% Hike

Japan’s Nikkei 225 reached a new intraday record before closing up 0.13%. The Bank of Japan raised its policy rate to 1%, the highest since 1995, and the market bought right through it. When a stock index rallies on a rate hike, the move is about confidence, not cost of money. South Korea’s Kospi ran 2.11%.

Hong Kong’s Hang Seng sank 1.64%, the weakest in Asia. Mainland China’s CSI 300 dipped 0.15%. Australia’s S&P/ASX 200 finished flat.

The Reserve Bank of Australia held at 4.35% and left the door open for more hikes. Inflation eased to 4.2% in April but is still above the 2%-3% target. The RBA pointed to higher fuel costs as a persistent source of price pressure. With crude now collapsing on the Iran deal, that argument gets harder to make at the next meeting.

The Stoxx 600 rose 0.6% in Europe, led by industrial and banking stocks riding the same risk-on move.

Tech Gained 3.39%, Energy Took the Hit

The money went straight to growth and straight out of energy on Monday. Information technology gained 3.39% and led every sector on the board. Communication services added 2.42%. Consumer discretionary picked up 1.91%. When crude breaks that fast, growth names don’t wait.

Energy fell 3.58%, the worst performer by a wide margin. Lower crude hits oil and gas names directly and the selling was broad. Real estate lost 0.90%, healthcare slipped 0.70%, and consumer staples shed 0.53%. Four sectors finished in the red but only energy saw real liquidation.

SpaceX Kept Running, Dave & Buster’s Got Crushed

SpaceX surged another 10% premarket Tuesday, trading near $212 for a 57% gain from last Friday’s $135 IPO price. Dave & Buster’s tumbled 14% after posting 16 cents a share against expectations of 60 cents, with revenue at $559.2 million missing the $580.6 million consensus and comp sales down 5.4%.

Huntsman plunged approximately 10% on an all-stock merger with Olin, which eased around 1%, with the deal expected to close in the first half of 2027. Robinhood lifted more than 2% after announcing a 10% workforce reduction with roughly $20 million in restructuring charges.

Daily June E-mini S&P 500 Index Futures Technical Analysis

June E-mini S&P 500 Index futures haven’t moved much overnight. They’re trading inside yesterday’s range, which suggests investor indecision and impending volatility.

The current price action suggests a neutral to bullish tone, but the near-term direction will depend on how traders react to the short-term retracement zone at 7479.50 to 7432.25.

Staying on the bullish side of this range will indicate the presence of buyers, which suggests traders are aiming at 7632.25 and a new record high. A drop below 7432.25 will indicate the return of sellers and the possibility of a secondary lower top. This move would be potentially bearish because it’s usually indicative of new short-sellers. If this move triggers enough downside momentum then look for the selling to continue into the 50-day moving average at 7310.64. If this fails then look for the weakness to extend into the main bottom at 7232.25.

To sum it up, trader reaction to 7479.50 to 7432.25 will set the tone.

What to Watch

The deal isn’t done. Switzerland is still waiting for the formal signing and the Strait of Hormuz reopening on Friday is a promise, not a fact. Iranian state media is already picking apart the toll-free access language. Crude dropped 5% on Monday pricing in a deal that hasn’t been executed yet, and if the terms fall apart, that premium comes right back.

Tuesday morning brings May housing starts and the export and import price indexes. Soft prints on top of a collapsing oil price give Warsh room to hold the line on hikes, and the hawks know it.

Technically the 7479.50 to 7432.25 zone on the June E-mini S&P 500 is where the next move starts. Buyers defending that range opens 7632.25. A break below it exposes the 50-day at 7310.64 and the 7232.25 low underneath.

More Information in our Economic Calendar.