US stock futures traded higher on Friday, 12 June, as hopes of a potential peace deal between the US and Iran improved sentiment, while a rebound in chip stocks and a sharp retreat in crude oil prices positioned Wall Street for weekly gains.
S&P 500 futures rose 0.6%, extending their rally into a second straight session. Nasdaq 100 futures and Dow Jones Industrial Average futures each advanced 0.7%. In the previous session, all three major indices ended sharply higher, gaining up to 2.5%, supported by a strong rebound in semiconductor stocks.
Market sentiment, which has remained fragile since last week, improved after US President Donald Trump said on Thursday that he had called off planned military strikes on Iran, claiming progress in negotiations aimed at ending the conflict. His remarks came just hours after he had threatened to escalate the situation by targeting Iran’s oil infrastructure.
A memorandum between the United States and Iran to halt the conflict in the Gulf could be signed as early as Sunday, a Western source told Reuters on Friday, with Geneva emerging as the most likely venue. Earlier this week, Trump had accused Iran of delaying peace negotiations.
Meanwhile, Iran’s Mehr News Agency reported that the final round of negotiations on a memorandum of understanding with the US would focus on nuclear and economic issues, while excluding discussions related to Iran’s missile programme. Israeli Prime Minister Benjamin Netanyahu’s office said on Thursday that Israel is not a party to the emerging agreement between Washington and Tehran.
Since the US announced a ceasefire with Iran on 7 April, Trump has repeatedly stated that a peace agreement with Tehran was close. However, none of those predictions has materialised so far.
The standoff between the US and Iran has deepened the energy crunch, with flows through the vital Strait of Hormuz remaining severely disrupted. Even if a peace agreement is reached, several challenges could delay the full resumption of normal oil shipments, as per analysts.
While traders remain focused on developments in the Middle East, attention has also shifted to the highly anticipated public listing of SpaceX, Elon Musk’s rocket company, which is expected to debut on Nasdaq.
SpaceX is set to go public under the ticker symbol SPCX at a fixed price of $135 per share, implying a valuation of approximately $1.77 trillion.
Crude oil prices sink to two-month low
Amid rising optimism over a potential US-Iran peace agreement, crude oil prices retreated sharply in trade. Brent crude futures fell $3.13, or 3.46%, to $87.25 a barrel, surrendering much of their recent gains, though prices remain above pre-war levels.
West Texas Intermediate (WTI) crude declined $3.14, or 3.58%, to $84.57 per barrel. Both benchmarks touched their lowest levels since 17 April.
Since the conflict escalated in late February, the Strait of Hormuz has effectively remained shut. A full reopening of the waterway would provide significant relief to major Asian economies and could exert further downward pressure on oil prices, given that the route handles roughly one-fifth of global oil and LNG shipments.
The closure of the key maritime route forced several major oil-producing nations in West Asia to curtail output, tightening supplies and pushing Brent crude close to $120 per barrel at one stage.
US stocks in focus today
Space-related stocks rallied in pre-market trading ahead of the much-anticipated SpaceX IPO later in the day. Rocket Lab gained more than 4%, while AST SpaceMobile advanced 2%. Redwire climbed 1%, while EchoStar, which owns a stake in SpaceX, surged nearly 6%.
Meanwhile, Woodside Energy shares slipped more than 2% after reports that the company is exploring an increase in its stake in the Browse joint venture. AMC Entertainment edges higher after announcing the successful completion of a $150 million at-the-market equity offering.
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