U.S. stock futures hovered near flat levels Monday morning as investors took a cautious stance following last week’s sharp rally. The S&P 500 posted gains of more than 2% last week, driven by renewed optimism around trade negotiations and corporate earnings. However, uncertainty over diplomatic progress between the United States and Iran weighed on sentiment.
Oil prices climbed as talks between Washington and Tehran showed little sign of a breakthrough. Crude futures rose more than 1.5% in early trading, adding to gains from the previous week. The lack of tangible progress in diplomatic discussions kept energy markets on edge, with traders assessing the risk of potential supply disruptions.
The Dow Jones Industrial Average pointed to a flat open, while the Nasdaq 100 edged slightly higher. Market participants appeared reluctant to extend positions ahead of key economic data due later this week. Investors are also watching for further cues from the Federal Reserve regarding interest rate policy.
Energy stocks rallied in premarket trading, benefiting from higher crude prices. Major oil producers and service companies saw gains, while sectors such as technology and consumer discretionary remained mixed. The defensive tone suggested caution among traders ahead of a busy week for earnings and data releases.
Treasury yields edged lower as demand for safe-haven bonds increased. The yield on the 10-year note slipped by a few basis points, reflecting a slight risk-off mood across financial markets. Currency markets saw the dollar strengthen modestly against major peers.
Analysts noted that last week’s rally had priced in much of the positive news, leaving limited room for further upside without fresh catalysts. The lack of clear direction in futures indicated that the market was waiting for clarity on geopolitical and monetary policy fronts.
The ongoing stalemate in U.S.-Iran diplomacy kept energy prices elevated, adding uncertainty to the global growth outlook. Although the two sides continued talks, little progress was reported over the weekend, fueling concerns about a potential escalation. This backdrop left investors cautious ahead of a week that includes inflation data and earnings from major retailers.
