U.S. Stock futures rose on Tuesday after President Donald Trump told CNBC he expects a “great deal” with Iran before a Wednesday ceasefire deadline, with Dow Jones Industrial Average futures gaining 234 points, or 0.5%.
S&P 500 futures added 0.2% and Nasdaq 100 futures rose 0.3%, extending gains from a decline in oil prices where West Texas Intermediate fell 0.4% to above $89 per barrel and Brent shed 0.3% to trade above $95 a barrel. The move came after major averages slipped on Monday amid renewed tensions, with the Nasdaq Composite ending its longest winning streak since 1992.
Trump said on CNBC’s “Squawk Box” that Iran has no choice but to agree to terms, citing U.S. Military actions that have “taken out their Navy, we’ve taken out their Air Force, we’ve taken out their leaders.” He added, however, that the military remains ready to bomb Iran if no deal is signed by the ceasefire expiration and that he does not want to extend the deadline.
Earlier Tuesday, Trump posted on Truth Social that Iran “Violated the Cease Fire numerous times!” — a claim that contributed to market jitters over the weekend before futures reversed course on his diplomatic optimism.
Despite near-term volatility, some strategists remain bullish. Ohsung Kwon, chief equity strategist at Wells Fargo, told CNBC’s “Closing Bell: Overtime” on Monday that the market is poised to overshoot to the upside, with a year-end S&P 500 target of 7,300 representing about 3% upside from Monday’s close. He added that the economy should remain stable for the next three months.
For more on this story, see Trump seizes Iranian cargo ship, U.S. stock futures drop over 0.8%.
Investors are also watching Tuesday’s confirmation hearing for Federal Reserve chair nominee Kevin Warsh, whose prepared statement to the Senate Banking Committee emphasized the need for the central bank to stay independent of political influence. “The Fed must stay in its lane,” Warsh said, warning that independence is most at risk when the institution strays into fiscal and social policy areas where it lacks authority.
In individual stock movers, UnitedHealth shares jumped more than 7% after its first-quarter results topped expectations and the company raised its earnings outlook, reflecting continued strength in the managed care sector.
Separately, Avis Budget Group (CAR) continues to exhibit signs of a short squeeze, with shares rising another 6% on Tuesday following a 23% surge on Monday. Over the past month, the stock is up 500% and short interest stands at 25% of shares outstanding — a level considered extreme by market analysts, as a ratio above 20% signals high squeeze risk.
This follows our earlier report, U.S. stocks rise despite Iran war as investors bet Trump will back down under economic pressure.
According to Deutsche Bank analyst Chris Woronka, the squeeze was triggered early in the month when filings revealed that investors SRS and Pentwater collectively controlled 71% of Avis shares, rising to 108% when synthetic ownership is included. Woronka noted in an April 6 report that CAR has a history of sharp rallies, citing its more-than-doubling from $163 to $357 on November 2, 2021, driven by strong earnings and a 16% share repurchase in the fiscal third quarter of that year.
What are the risks if the Iran ceasefire deal fails?
If no agreement is reached by the Wednesday deadline, Trump said the U.S. Military is ready to bomb Iran, which could reignite geopolitical tensions and potentially reverse the recent decline in oil prices that has supported equity futures.
Why are investors watching the Fed chair nomination hearing?
Investors are monitoring Kevin Warsh’s confirmation hearing given that his emphasis on Federal Reserve independence from political influence could signal how monetary policy might be shaped amid ongoing economic uncertainty and inflation concerns.
