Nasdaq 100 futures have surged over 1%, reaching their highest level since late March, driven by optimism surrounding potential negotiations for a 45-day ceasefire in the Middle East. Reports indicate that while Iran has rejected a proposal to reopen the Strait of Hormuz, the market is buoyed by hopes of de-escalation, which could ease geopolitical tensions and restore tanker traffic.
This uptick in futures comes amid a backdrop of declining Brent crude prices, which fell from approximately $112 to below $108 per barrel, signaling a reduction in the geopolitical risk premium. Investor focus is now shifting to the upcoming US ISM Services data, with expectations of a notable increase in the prices sub-index, which could highlight potential stagflation risks if not aligned with other economic indicators.
Market professionals should closely monitor the ISM data release, as significant divergences in the components could impact market sentiment and lead to volatility, especially in sectors sensitive to energy costs and consumer spending.
Source: xtb.com