Dow Jones futures rise as lower crude oil prices improve market sentiment

Dow Jones futures gain by 0.60% to trade near 52,390 during European hours on Monday. Meanwhile, S&P 500 futures advance by 0.57% to trade around 7,760, while Nasdaq 100 futures rise by 0.86% to trade near 30,170.

US stock futures climb as market sentiment improved, driven by a drop in crude oil prices. This decline stemmed from growing hopes that increased diplomatic efforts could help end the Middle East conflict and restore stable energy flows from the region.

According to strategists at Deutsche Bank, “last week's equity market offered a useful illustration of how we believe the remainder of 2026 could unfold,” with price action splitting “neatly into two phases.” They note that, in the first phase, “the renewed rise in oil prices undermined risk appetite, with defensives, minimum volatility and value outperforming,” a pattern they see as a potential template for how markets may continue to react to future energy-price shocks over the course of the year.

Adding to the diplomatic momentum, US President Donald Trump stated he would "probably" be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the United Nations General Assembly in New York this week. Alongside this potential encounter, Trump may meet with other Persian Gulf leaders and is scheduled to hold a summit with Chinese President Xi Jinping.

Despite the positive market tailwinds, traders may adopt a cautious approach amid hawkish sentiment surrounding the Federal Reserve's policy outlook. This follows last week's Fed decision to implement a 25-basis-point rate hike—its first in three years—aiming to curb inflation while signaling additional increases ahead.

According to the CME FedWatch tool, markets now price in a 53.1% probability of another rate hike at the October meeting, up from 43.5% the prior week. Emphasizing the central bank's firm stance, Fed Chair Kevin Warsh stated that inflation remains unacceptably high and that recent summer readings show no meaningful improvement in underlying trends.