Dow futures rise over 400 points: 5 things to know before market opens

• S&P 500 futures rose 0.87% and Dow futures climbed 432 points (0.95%) on signs of potential Iran conflict de-escalation, though major indexes face their largest monthly drops in over three years
• Oil price surge has revived inflation fears, with money markets now pricing zero Fed rate cuts in 2026 compared to two cuts expected before the war began
• Energy stocks bucked the broader market decline, with the S&P 500 energy index up over 11% in March and positioned as the only positive sector for the month

Market Summary: US Futures Rally on Iran Conflict De-escalation Signs

Market Movement:

US stock index futures surged Tuesday morning, with Dow futures climbing 432 points (+0.95%), S&P 500 futures up 0.87%, and Nasdaq 100 futures gaining 0.86%. The rally followed reports that President Trump indicated willingness to end military operations against Iran, even with the Strait of Hormuz partially closed.

Monthly Performance Context:

Despite Tuesday's gains, both the S&P 500 and Dow remain on track for their worst monthly performance since September 2022, driven by month-long geopolitical tensions. Both indexes confirmed corrections last week, falling 10% below record highs. The small-cap Russell 2000 entered correction territory earlier in March.

Sector Highlights:

The S&P 500 energy index stands as the sole positive performer for March, gaining over 11% and heading for a record monthly gain amid elevated oil prices.

Federal Reserve Outlook:

Inflation concerns from the oil price spike have dramatically shifted Fed expectations. Market participants have priced out all rate cuts for 2026, down from two anticipated cuts before the conflict began. Fed Chair Jerome Powell indicated Monday the central bank would wait to assess war impacts before acting.

Economic Data Ahead:

Investors will monitor February's job openings data and comments from Fed officials Austan Goolsbee and Michelle Bowman during the holiday-shortened week.

Individual Movers:

McCormick and Emerson Electric (+2.2%) advanced on positive analyst coverage from Jefferies.

Analyst Perspective:

BNP Paribas notes investors aren't expecting significant growth damage, with many analysts maintaining pre-war index targets despite elevated inflation risks from higher energy prices.