June 15 (Reuters) - Futures tracking Wall Street's main indexes jumped more than 1% each on Monday as investors cheered a preliminary pact struck between the U.S. and Iran to end the more than three-month conflict and reopen the strategic Strait of Hormuz.
The framework for a deal, however, did not address sticking issues such as Iran's nuclear program and the conflict between Lebanon and Israel. The agreement is expected to be officially signed on Friday in Switzerland.
Crude prices tumbled over 4%
to their lowest since March following the news and are likely to put the focus on energy price-sensitive airlines and cruise stocks later in the day, such as Delta and Norwegian Cruise, along with energy companies such as Occidental and Exxon.
"If the overnight news of a deal between the U.S. and Iran proves to be credible and lasting, this should be taken as a positive, whereas setbacks will likely be taken as less of a negative by risk assets," said Max Kettner, chief multi-asset strategist at HSBC Global Investment Research.
Analysts caution that Brent crude prices could hover around $80 a barrel despite the resolution, as energy flows resume through the Strait and Middle Eastern countries restore damaged infrastructure.
Data from last week indicated that higher energy costs were filtering into consumer inflation, sharpening the focus on the Federal Reserve's outlook at the monetary policy meeting later this week.
The yield on the benchmark 2-year Treasury note, reflecting interest rate expectations, slipped by 7 basis points to a two-week low.
The Fed is expected to leave interest rates unchanged later this week; however, traders still expect the central bank to hike borrowing costs by at least 25 bps by year-end, according to the CME Group's FedWatch tool.
At 04:03 a.m. ET, Dow E-minis were up 519 points, or 1.01%, S&P 500 E-minis were up 94.5 points, or 1.27%, and Nasdaq 100 E-minis were up 622 points, or 2.1%.
SpaceX's shares rose 6% in premarket trading after the Elon Musk-led company ended at $160.95 per share at its debut from an IPO price of $135.
A collective sigh of relief swept across Wall Street after trading in SpaceX’s landmark Nasdaq launch went smoothly, setting a new template for the trading firms and exchanges bracing for the giant IPOs of OpenAI and Anthropic later this year.
All three indexes ended the week higher despite AI shares coming under pressure early in the week. Analysts pointed to the tech sector's sensitivity to higher interest rates and to potential positioning ahead of the highly anticipated SpaceX IPO as the drivers of the sell-off.
Attention this week will turn to Fed chair Kevin Warsh's first meeting at the helm, with investors gauging his communication style and looking to economic and interest rate projections for hints on the interest rate path.
Among other early movers, Paramount Skydance shares gained 5.8% after the U.S. Justice Department cleared the company's acquisition of Warner Bros.
(Reporting by Johann M Cherian and Twesha Dikshit in Bengaluru; Editing by Rashmi Aich)
