S&P 500 Forecast: SPX rises as oil eases & the US-Iran ceasefire holds

US futures                                         

Dow futures 0.37%, S&P futures 0.44%  & Nasdaq futures 0.76%

In Europe                                                                        

FTSE -0.5% & DAX 1.1%

• US stocks rise as oil prices ease but remain elevated
• The Middle East ceasefire appears on shaky ground
• US ISM PMIs are expected to slow to 53.8 from 54
• Oil is falling after 5% gain yesterday

US stocks rise despite Middle East tensions as earnings support sentiment

US equities are moving higher on Tuesday, even as escalating tensions between the US and Iran around the Strait of Hormuz keep oil prices elevated.

Recent hostilities have threatened a fragile ceasefire after both sides exchanged fire in the Gulf on Monday. President Trump’s efforts to reopen the Strait were met with resistance from Iran. Still, investors found some reassurance in comments from President Donald Trump suggesting the conflict could be contained within the next two to three weeks — despite ongoing disruption to shipping routes. Investors are also finding some reassurance in the fact that the diplomatic push to resolve the conflict continues.

Markets continue to draw support from a strong US earnings season, with corporate results broadly beating expectations. Solid fundamentals have helped equities look through near-term geopolitical risks, though sentiment remains vulnerable. Even US entities could face serious headwinds should the Strait of Hormuz remain closed for an extended period.

On the data front, attention turns to US ISM services PMI, expected to ease slightly to 53.8 from 54.0, ahead of the nonfarm payrolls report later this week.

Corporate movers

• DuPont rises 3.4% after raising its annual profit forecast.
• Prep dealing stocks such as Coinbase and strategy are also extending gains as Bitcoin rallies over 6% so far this month.
• Pinterest jumps 17% after forecasting second-quarter revenue above expectations.
• Intel gains over 4% after reports that Apple has held exploratory talks with Intel and Samsung Electronics on chip production.

S&P 500 – Technical analysis

The S&P 500 has rebounded from its 6,050 low in 2026 to a record high near 7,270. The index is now consolidating above 7,200, with RSI hovering in overbought territory, suggesting scope for near-term consolidation.

A break above 7,270 would expose 7,300 and 7,400.

Immediate support lies at 7,200; a move below would open the door to 7,050, with stronger support at 7,000.

FX: dollar supported, sterling struggles

The US dollar is modestly firmer, supported by elevated oil prices and geopolitical risk, even as Treasury yields ease slightly. Expectations that the Federal Reserve will keep rates unchanged for an extended period are also underpinning the currency.

EUR/USD is struggling near 1.17 amid concerns about the stability of the ceasefire. Focus turns to remarks from Christine Lagarde later today, with some policymakers signalling potential rate hikes in the coming months.

GBP/USD remains under pressure below 1.3550 as Middle East tensions weigh on risk sentiment. Domestic political uncertainty ahead of local elections is also limiting gains, despite expectations for further tightening from the Bank of England.

Oil pulls back after surge, but risks remain elevated

Oil prices are easing on Tuesday after a near 5% rally in the previous session, as markets continue to assess developments in the Middle East.

The US and Iran exchanged fire in the Strait of Hormuz, raising concerns about the durability of any ceasefire. The confrontation occurred as US forces attempted to escort vessels through the key shipping route, while the UAE reported intercepting Iranian missiles near critical infrastructure.

With the shipping route still constrained and no clear resolution in sight, the risk of ongoing supply disruption — particularly for refined products — remains high, keeping a firm floor under oil prices.