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US Stock Futures Rally as US-Iran Peace Deal Boosts Market Sentiment Ahead of Fed Meeting

US Stock Futures Rally as US-Iran Peace Deal Boosts Market Sentiment Ahead of Fed Meeting. Source: Carlos Delgado, CC BY-SA 3.0, via Wikimedia Commons

U.S. stock index futures surged on Sunday evening after the United States and Iran confirmed they had reached a peace agreement aimed at ending hostilities and restoring key shipping routes across the Middle East. The development fueled optimism among investors, driving futures higher as markets prepare for a closely watched Federal Reserve meeting this week.

As of Sunday evening, S&P 500 Futures climbed 0.8% to 7,557.75, while Nasdaq 100 Futures jumped 1.3% to 30,337.74. Dow Jones Futures also gained 0.6%, reaching 51,917.0. The gains followed a strong performance on Wall Street last Friday, supported by easing geopolitical concerns and continued investor appetite for growth stocks.

U.S. President Donald Trump announced that a peace deal with Iran had been finalized, adding that the strategically important Strait of Hormuz is expected to reopen in the coming days. Iranian Deputy Foreign Minister Kazem Gharibabadi also confirmed that both countries had completed a memorandum of understanding, with a formal signing ceremony scheduled for Friday in Switzerland.

While specific details of the agreement remain limited, market participants expect the deal to restore shipping activity through the Strait of Hormuz and reduce disruptions to global energy supplies. The agreement could also ease inflationary pressures that intensified during months of conflict and shipping interruptions across the region.

Investor sentiment has improved significantly on expectations that lower energy prices could support economic growth and eventually create room for future Federal Reserve rate cuts. However, policymakers are widely expected to leave interest rates unchanged at this week’s meeting.

The upcoming meeting will be the first led by Federal Reserve Chair Kevin Warsh. Investors will closely monitor the central bank’s commentary for clues regarding future monetary policy, especially as inflation remains elevated and the U.S. labor market continues to show resilience.

Meanwhile, SpaceX remained a major market focus after soaring more than 19% during its trading debut. The aerospace company raised $75 billion in what became the largest IPO in U.S. history, pushing its market valuation to approximately $2 trillion and making CEO Elon Musk the world’s first trillionaire.

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