Dow Jones Industrial Average futures hovered near the flat line on Monday as investors weighed progress in US-Iran peace talks and waited for Thursday's inflation report. Nasdaq 100 contracts edged up 0.2%, a small move that showed traders were still willing to take some risk even as they kept one eye on Washington and Tehran.
The market's focus is tied to the next data point on the calendar: the May reading of the Personal Consumption Expenditures price index, due Thursday. Economists expect core PCE to show a modest acceleration from April, which would keep the debate alive over whether interest rates stay higher for longer after the Federal Reserve struck a more hawkish tone at its latest meeting.
Behind the futures action was a diplomatic step that could matter well beyond one morning of trading. The United States and Iran made encouraging progress in Switzerland on Monday, and mediators said the two sides agreed on a roadmap to seal a final deal within 60 days. Vice President JD Vance met Iranian officials for the first talks under an interim peace deal, making him the most visible figure in a process that has now moved from threats to negotiation.
That progress did not come without noise. On Sunday, Iranian media reported that the Islamic Republic had halted the talks after President Donald Trump threatened strikes if Tehran did not rein in Hezbollah's actions against Israel, but people familiar with the matter said the talks continued. Officials from Qatar and Pakistan said the first session had concluded with progress on the same 60-day roadmap, leaving the market to sort through two versions of the same day: one of disruption, one of movement.
Other markets pointed in the same direction. Japan's Nikkei rose 1.8% and South Korea's Kospi added 0.6%, while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.8%. Chinese blue chips rose 1.6%, though Hong Kong's Hang Seng Index fell 0.7%, a reminder that the relief from the talks was not evenly shared across the region.
Oil added another layer to the picture. Prices moved as traders weighed Trump's warning against hopes that progress in the talks could normalize flows through the Strait of Hormuz, one of the routes that would matter most if the dispute eases. For now, the clearest read is that markets are treating Monday's diplomacy as real enough to watch, but not final enough to price in as settled.
Thursday's PCE report is the next test, and it may matter more than the morning's headlines. If inflation runs hotter than expected, the case for slower policy easing strengthens even if the talks hold. If it comes in milder, the market gets room to focus on the possibility that a 60-day roadmap is more than a talking point and that risk assets can keep leaning into it.
