US Stock Futures Climb as Oil Prices Plunge Before Fed Meeting and Tech Earnings

US stock futures surged Monday morning, fueled by a sharp decline in oil prices that eased inflation worries and geopolitical tensions. S&P 500 futures gained 0.8%, Nasdaq 100 futures jumped 1.4%, and Dow Jones futures picked up nearly 400 points heading into the trading day.

Oil Prices Slide on Diplomatic Progress

Brent crude fell 5% to $87.13 per barrel, while West Texas Intermediate dropped 5.5% to $84.37. The fall followed reports that the US and Iran agreed to pause hostilities, halting planned air strikes to give diplomacy a chance, as The Wall Street Journal revealed. This de-escalation reduced the geopolitical risk premium that had sent oil prices higher last week and stoked inflation fears. Last week saw major indexes slip amid Middle East tensions pushing energy costs up.

"Investors welcomed the news of a pause in conflict," said Kathleen Brooks, research director at XTB. The easing oil prices also softened bond yields, with the 10-year Treasury rate dipping 4 basis points to 4.64%, relieving pressure on markets concerned about rising borrowing costs.

All eyes now turn to the Federal Reserve's Wednesday meeting. Market expectations are split, with the CME FedWatch tool showing a 66% chance of the Fed holding rates steady and a 34% chance of another hike. This decision will likely steer market direction for the remainder of the week.

Adding to the market focus, key tech giants Microsoft, Meta, Apple, and Amazon are slated to release earnings this week. Investors will be looking for insight into the sustainability of the artificial intelligence spending boom, with results potentially swinging sentiment sharply depending on beats or misses.

Monday’s positive futures contrast with last week’s losses prompted by geopolitical risk. The combination of falling oil prices, a clearer outlook on Middle East tensions, and the upcoming tech earnings season has lifted investor mood, suggesting a cautious but optimistic tone as major policy and corporate data approach.