Iran peace deal turbocharges US equity futures as oil dives

US equity futures surge as Iran peace deal sends oil lower

United States (US) equity markets closed higher on Friday, driven by excitement around SpaceX’s blockbuster initial public offering (IPO) debut and reports suggesting Washington and Tehran were closing in on a Memorandum of Understanding (MoU). For the week, the  Nasdaq rose 2.34%, the S&P 500 added 0.65%, and the Dow Jones climbed 335 points (0.66%).

The stage is set for those gains to extend early this week as reports surfaced that the terms of the MoU have officially been agreed upon by both Iran and the US. The deal, which is set to be signed in Switzerland on 19 June, reportedly includes the following key terms:

• An extended 60-day ceasefire between the US and Iran
• A 60-day negotiation period for technical discussions around Iran’s nuclear program
• The removal of the US naval blockade and the reopening of the Strait of Hormuz within 30 days
• A US commitment to discuss sanctions relief with Iran
• A US commitment to discuss the release of frozen Iranian funds
• A permanent end to fighting on all fronts, including Lebanon
• Final negotiations will not begin until half of Iran’s frozen funds are released, oil sanctions are suspended, and the naval blockade is lifted
• The final agreement is to be approved by a resolution of the United Nations (UN) Security Council.

In response, US equity futures have soared, with the Nasdaq up 2.72% to 30,469 and Dow Jones futures jumping 798 points (1.56%) to 52,025. Over in the energy space, West Texas Intermediate (WTI) crude oil is trading 4.16% lower at $80.76.

Given the uncertainties surrounding the next 60 days of negotiations, particularly around the complex nuclear issues, there do appear to be limits to how much further crude oil can fall from here. Importing nations will undoubtedly use the reopening of the Strait to replenish depleted stockpiles and refill their strategic petroleum reserves (SPRs). On top of that, oil prices and US equity futures had already moved to price in a deal in the lead up, meaning we could well see some near-term profit-taking across both markets once the initial euphoria subsides.

Geopolitical risks persist despite diplomatic breakthrough

Furthermore, the diplomatic path forward remains perilous. Israel’s Benjamin Netanyahu has directly rejected the Lebanon clause of the US-Iran agreement, reportedly telling President Trump that the Israel Defense Forces (IDF) will not withdraw from Lebanon and that Israel does not consider itself bound by the clause. Adding to the geopolitical risks ahead, the New York Times has reported that the US plans to resume strikes on Iran if a nuclear accord cannot be reached.

Looking ahead, after the developments outlined above have been digested in the early part of the week, the broader focus will shift to Thursday’s Federal Open Market Committee (FOMC) meeting, previewed below, notably the first chaired by Kevin Warsh.

US: Fed interest rate decision

Date: Thursday, 18 June at 4.00am AEST

At its April meeting, the FOMC maintained the target range for the Federal Funds rate at 3.50% - 3.75%, emphasising a data-dependent approach while acknowledging the added uncertainty created by the Middle East conflict and higher energy prices.

Since the April meeting, a run of firmer-than-expected US data has shifted market expectations noticeably. May’s consumer price index (CPI) report showed headline inflation accelerating to 4.2% year-on-year (YoY), the fastest pace in three years. The May employment report added further to the hawkish tilt, with non-farm payrolls rising by a much stronger-than-expected 172,000 (versus consensus forecasts around 85,000), while the unemployment rate held steady at 4.3%. Furthermore, recent manufacturing purchasing managers’ indices (PMIs) have also surprised to the upside, pointing to improving factory activity.

With rates widely expected to be left on hold this week, investors will scrutinise Warsh’s tone closely for signals on how the new leadership views persistent inflation and energy-driven uncertainty. Given sticky services CPI and the lingering energy uncertainty out of the Middle East, the updated dot plot is expected to show that the residual cut previously left in 2026 has been removed. Heavier interest will instead centre on the 2027 median dot as a key signal of the Warsh Fed’s medium-term directional leaning.

The US interest rates market starts the week pricing in 19 basis points (bp) of a rate hike before year end, with a full hike priced for January 2027.

Fed Funds rate chart

Nasdaq 100 technical analysis

From its late-March low of 22,841, the Nasdaq 100 launched a jaw-dropping rally, surging around 35% in just over nine weeks to reach a record high of 30,762 in early June. The rally was in line with our bullish calls but hit the 30,000 target some seven months earlier than we were expecting.

In that context, the 8.3% pullback to last week’s low of 28,196 was hardly surprising. The move was preceded by clear bearish relative strength index (RSI) divergence, which prompted our calls in late-May that chasing the rally and giving in to fear of missing out (FOMO) was becoming increasingly risky.

Looking ahead, as long as the Nasdaq 100 holds above the key support band of 28,600 - 28,200 (the mid-May lows and last week’s low), the door remains open for a retest and potential break of the 30,762 record high, before the next upside target at around 32,000. However, a sustained break below the 28,600 - 28,200 zone would open the door to a deeper correction toward the 27,500 - 27,300 region.

Nasdaq 100 daily candlestick chart

Dow Jones technical analysis

From its late-March low of 45,063, the Dow Jones staged an impressive rally, surging 14.5% in just over nine weeks to hit a fresh record high of 51,665 in early June.

Last week’s pullback briefly dipped below near-term support in the 50,500 - 50,300 zone, but the index found solid buying interest at the psychologically important 50,000 level, preserving the broader uptrend.

This leaves the Dow well placed to retest and potentially break through the 51,665 record high, before extending its move towards the next upside target around 52,500. That said, a sustained break below the 50,000 - 49,900 support band would open the door to a deeper correction toward the 49,200 - 48,800 area.

Dow Jones daily candlestick chart

• _{Source: TradingView. The figures stated are as of 15 June 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}