S&P 500 futures rally on Iran ceasefire; eyes 50-day moving average breakout

U.S. stock index futures rose sharply overnight after President Donald Trump announced a two-week ceasefire related to Iran. June E-mini S&P 500 Index futures gapped above a one-month trend line resistance level, moving into an area that could act as a barrier—or a trigger—for further upside momentum.

Technical outlook for S&P 500 futures

After breaking higher, buyers pushed through the 50% level at 6725.00, which has now turned into new support. The market is now testing the 61.8% level at 6812.50, described as another trigger point that could lead to a larger move toward 6940.50.

With additional buying momentum, the futures contract could also overtake both the 200-day and 50-day moving averages within the same session. The article notes this would represent a major trend change, particularly after the pronounced sell-off in March.

Ceasefire announcement drives “relief buying”

The rally followed the announcement of a two-week suspension of attacks on Iran, which was reported to have hit the wires just before the midnight deadline. The article frames the move as relief after five weeks of war and the market’s focus on a closed Strait of Hormuz.

Dow futures surged 967 points, or 2.1%. S&P 500 futures matched the gain, while Nasdaq 100 futures rose 2.3%. The article characterizes the move as “pure relief buying.”

Oil falls sharply as Hormuz reopening comes into view

Oil prices dropped hard. West Texas Intermediate crude oil futures fell about 18% and moved below $93 a barrel. The article says traders are pricing in the possibility of an open Strait of Hormuz rather than waiting to see whether the ceasefire holds.

What the temporary arrangement involves

Trump said a proposal from Iran gave him something to work with and described it as “double-sided,” with both countries standing down. The article states the condition for the arrangement is reopening the Strait of Hormuz.

According to the article, Iran said it would reopen the strait for two weeks if attacks stop completely. It also reports that Israel has signed on to the temporary arrangement.

Why caution remains

The article emphasizes that the market is not treating the ceasefire as a permanent resolution. It notes that short-term pauses have occurred before without holding, and that two weeks may provide time but does not solve underlying issues.

It also highlights that the S&P 500 remains 5.5% below its all-time high. Oil is up more than 70% for the year, and gas prices are above $4 a gallon, suggesting problems have not disappeared overnight.

Next steps for markets

Delta Air Lines is scheduled to report before Wednesday’s open, which the article says will provide the first look at how the war affected airlines. Beyond that, the article states the key question for traders is whether the ceasefire holds.