Nasdaq to lead Wall Street higher as investors catch up with gains after holiday

• Donald Trump announced a 'memorandum of understanding' had been 'largely negotiated' for ending the US-Israel-Iran conflict, lifting European indices by as much as 2% on Monday
• WTI crude dropped below $91 per barrel (mid-April levels) before recovering to $92.60 as US launched 'defensive' strikes on Iranian missile sites during the seven-week ceasefire
• S&P 500 companies reporting 28.4% year-over-year earnings growth as of Friday (94% reported), marking the highest rate since the 2021 Covid-rebound period

Market Summary: Wall Street Poised for Gains on Ceasefire Progress

Market Opening: US stocks are set to open higher following Memorial Day, with Nasdaq futures leading gains at 1%, while Dow Jones and S&P 500 futures up 0.5-0.6%. Markets are catching up to strong European performance, which rallied up to 2% on Monday.

Geopolitical Developments: President Trump announced a "memorandum of understanding" has been "largely negotiated" to end the US-Israel-Iran conflict, driving initial optimism. However, tensions persist after fresh US strikes on Iranian missile sites and boats, described as "defensive" actions during a seven-week ceasefire. Iranian negotiators are in Qatar discussing frozen assets and broader agreements, though Iran's Foreign Ministry indicates no breakthrough yet. Secretary of State Marco Rubio expects negotiations to continue for several more days.

Commodities: WTI crude initially dropped below $91/barrel (mid-April levels) on ceasefire optimism but recovered to $92.60 amid renewed tensions.

Earnings Season: 94% of S&P 500 companies have reported as of Friday, showing 28.4% year-over-year earnings growth—the highest since the 2021 COVID recovery period. Key earnings this week include Marvell, Salesforce, Snowflake, Costco, and Dell.

Economic Outlook: Persistent inflation concerns support a hawkish Federal Reserve stance and are strengthening the dollar through safe-haven demand. The critical core PCE inflation data releases Thursday.

Market Implications: Despite geopolitical setbacks, futures remain positive, suggesting investor optimism about potential Gulf peace. However, analyst David Morrison notes limited market-moving catalysts this week beyond the Iran situation and PCE data.