The United States and Iran agreed Sunday to pause military strikes and meet Tuesday in Qatar to resume talks, according to an Axios report published Sunday. The agreement follows a weekend escalation that began Thursday when Iran targeted commercial ships in the Strait of Hormuz and military bases in Kuwait and Bahrain, triggering U.S. retaliatory attacks. The two countries had signed a ceasefire in Switzerland approximately 10 days prior to end conflict that stretched since late February.
U.S. Stock Futures Gain Sunday Night on Diplomatic Reports
U.S. stock futures climbed in the overnight session Sunday following the reported agreement. S&P 500 futures gained 0.45%, Dow futures rose 0.22%, and Nasdaq 100 futures climbed 0.43% at 9:08 PM EDT. The SPDR S&P 500 ETF (SPY), Invesco QQQ Trust (QQQ), and SPDR Dow Jones Industrial Average ETF Trust (DIA) all traded higher at the time of writing. The iShares 20+ Year Treasury Bond ETF (TLT) traded down 0.15%.
U.S. Markets Close Mixed Friday After Weekly Rotation
U.S. stock markets ended Friday with mixed results as investors rotated out of technology stocks. The Dow Jones Industrial Average closed at 51,876.11, down 0.09%. The S&P 500 closed at 7,354.02, declining 0.05%. The Nasdaq Composite closed at 25,297.62, down 0.24%. For the week ending Friday, the Dow climbed about 0.62%, while the S&P 500 shed 1.95% and the Nasdaq declined 4.48%.
Iran Attacks Thursday Trigger U.S. Retaliation and Ceasefire Breakdown
The conflict intensified Thursday when Iran targeted a container ship, an oil vessel carrying Qatari crude, and military bases in Kuwait and Bahrain. The attacks triggered multiple U.S. retaliatory strikes. U.S. President Donald Trump said in a Truth Social post late Saturday: "United States aircraft just struck Iranian missile and drone storage locations, and coastal radar sites, for violating the Cease Fire Agreement, AGAIN! It is very possible that they will never learn!" Trump added: "There may come a point when we are no longer able to be reasonable, and will be forced to militarily complete the job that we very successfully started. If that happens, the Islamic Republic of Iran will no longer exist!"
According to the Axios report from Sunday, a senior U.S. official said: "We decided to stop all the kinetic activity." Another official stated that both countries will stand down "for now" and that "vessels can move freely" through the Strait as talks resume. Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab, told Bloomberg: "Investors see the exchange of attacks between the US and Iran as temporary and do not believe the situation will escalate into another war." Jim Chanos, founder of Kynikos Associates, said in a post on X: "It's literally the same story leaked every Sunday afternoon."
Non-Farm Payroll Report and ISM PMI Scheduled This Week
Markets will watch several key U.S. economic releases this week. The non-farm payroll report for June and the ISM Manufacturing PMI are among the top releases expected. The annual central banker conference in Sintra, Portugal — officially the ECB Forum on Central Banking — is scheduled for the week, with Federal Reserve Chair Kevin Warsh expected to speak. U.S. stock and bond markets will be closed Friday, July 3, in observance of Independence Day.
SLS, WEN, MSTR, WDC See Notable Stock Movements
Sellas Life Sciences Group (SLS) continued to attract attention from retail traders over the weekend as short interest hit an all-time high last week, while investors weighed acquisition speculation sparked by revisions in executive severance terms. Wendy's Co. (WEN) recorded the best weekly gains in more than six years. Strategy (MSTR) faced growing scrutiny after its market-value-to-net-asset-value ratio fell below 1 for the first time over the weekend. Western Digital Corp. (WDC) slid more than 13% at close Friday, making it one of the largest decliners among AI-linked names last week.
Oil Prices Climb Sunday on Middle East Tensions
Crude oil prices climbed late Sunday over the latest Middle East developments. Brent crude futures expiring in August traded 0.92% higher at around $72.65 per barrel at the time of writing. WTI crude futures expiring in August climbed about 1% to $69.92 per barrel. Yields on the 10-year Treasury were at 4.386%. Spot gold prices declined to around $4,056.84 an ounce. Asian markets traded mixed at the open Monday. South Korea's KOSPI, Japan's Nikkei 225, and China's SSE Composite index edged lower, while Australian stocks climbed higher.
FAQ
What did the U.S. and Iran agree to on Sunday?
According to an Axios report published Sunday, the United States and Iran agreed to pause military strikes and meet Tuesday in Qatar to resume talks. A senior U.S. official told Axios: "We decided to stop all the kinetic activity." Another official stated that both countries will stand down "for now" and that "vessels can move freely" through the Strait as talks resume.
Why did tensions escalate between the U.S. and Iran last week?
The conflict intensified Thursday when Iran targeted a container ship, an oil vessel carrying Qatari crude, and military bases in Kuwait and Bahrain. The attacks triggered multiple U.S. retaliatory strikes. U.S. President Donald Trump said in a Truth Social post late Saturday that United States aircraft struck Iranian missile and drone storage locations and coastal radar sites for violating the ceasefire agreement.
What economic data releases are scheduled this week?
The non-farm payroll report for June and the ISM Manufacturing PMI are among the top U.S. economic releases expected this week. The annual central banker conference in Sintra, Portugal — officially the ECB Forum on Central Banking — is also scheduled, with Federal Reserve Chair Kevin Warsh expected to speak. U.S. stock and bond markets will be closed Friday, July 3, in observance of Independence Day.
