S&P 500 Futures Rally as Iran Deal Reopens Hormuz

S&P 500 futures and European equity futures advanced after US and Iranian officials agreed a framework to end the conflict and reopen the Strait of Hormuz. Brent crude oil fell sharply., easing inflation concerns and supporting bond markets, while US Treasury yields moved lower and interest-rate expectations became more dovish. Asian markets surged, led by strong gains in Japan and South Korea, and ECB President Christine Lagarde welcomed the agreement as positive for trade and energy flows.

Equities

The FTSE 100 closed 1.6% higher on Friday at 10,471.7, its strongest finish since late May, while the FTSE 250 also gained 1.6% and recorded its best daily performance in more than five weeks. Both indices ended the week with gains of more than 1% as hopes grew that a peace agreement between the United States and Iran could be reached, contributing to lower oil prices and supporting broad market sentiment.

Travel and leisure shares led the advance in London, with the sector rising 3.9%. British Airways owner IAG and budget airline Wizz Air were among the strongest performers as lower crude prices improved the outlook for airline operating costs. Banks also performed strongly, with the banking sector climbing 4.2%, while aerospace and defence stocks added 2.2%.

Energy shares moved in the opposite direction, falling 1.8% as oil prices retreated. McBride closed 14.6% lower after the cleaning products manufacturer warned that profits over the next two years would fall short of market expectations. The company said future earnings would be pressured despite recent progress in its business.

Economic data showed the UK economy contracted by 0.1% in April, marking its first monthly decline since August 2025. Separate figures from the Bank of England’s inflation attitudes survey showed long-term inflation expectations among the public reached a record high during May.

In the United States, the Dow Jones Industrial Average rose 0.7% on Friday, while the S&P 500 gained 0.5% and the Nasdaq Composite added 0.3%. The Russell 2000 small-cap index reached a record closing high. All three major US indices finished the week around 7% higher.

SpaceX dominated trading after its highly anticipated Nasdaq debut. Shares closed 19.2% above their initial public offering price at $160.95, giving the company a market value of approximately $2.1 trillion and making it one of the largest listed companies in the United States.

The strong debut weighed on several companies that had rallied ahead of the listing. Rocket Lab fell 10.8%, Intuitive Machines dropped 13.1% and Planet Labs declined 8.8%. Tesla gained 1.8%, while Adobe fell 6.8% after announcing the departure of Chief Financial Officer Dan Durn.

Forex & Commodities

The US dollar weakened early on Monday, falling to its lowest level since 5 June after the United States and Iran agreed a framework to end their conflict and reopen the Strait of Hormuz. The dollar index slipped to 99.40, while the euro strengthened to $1.162 and sterling rose to $1.346, both reaching their strongest levels in around ten days. The Australian dollar also moved higher to $0.7087 and the New Zealand dollar climbed to $0.5863.

Gold prices moved higher despite easing geopolitical tensions. Spot gold rose to $4,323 per ounce early on Monday, extending gains for a third consecutive session as the weaker US dollar improved bullion’s appeal. Silver traded at $70.19 per ounce, while platinum reached $1,765 and palladium advanced to $1,323.

Oil prices fell sharply after confirmation that Washington and Tehran had reached a preliminary agreement to halt hostilities. Brent crude dropped to $83.82 per barrel early on Monday as traders responded to plans for the Strait of Hormuz to reopen and for energy exports to resume more freely. The memorandum of understanding is expected to be formally signed in Switzerland on Friday, although negotiations over Iran’s nuclear programme will continue during a 60-day ceasefire period.