U.S. Stock futures edged higher early Friday after President Donald Trump said the war in Iran “should be ending pretty soon,” marking another day of gains driven by hopes for a diplomatic breakthrough even as underlying tensions remain unresolved.
The S&P 500 futures rose 0.2%, Nasdaq 100 futures inched up 0.1%, and Dow Jones futures gained 172 points, or 0.35%, building on Thursday’s rally that saw all three major indexes close at new highs. The Dow added 115 points, or 0.24%, while the S&P 500 and Nasdaq climbed 0.26% and 0.36% respectively, extending a streak that has left the S&P 500 up 3.3% and the Nasdaq 5.2% for the week.
Trump’s remarks came hours after he announced a 10-day ceasefire between Israel and Lebanon, set to initiate at 5 p.m. ET, following what he described as “excellent conversations” with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He suggested the next round of in-person talks could occur “probably, maybe, next weekend.”
Yet the ceasefire does not resolve the core dispute between the U.S. And Iran. Iran insists any agreement must include a halt to Israeli military operations in Lebanon against Hezbollah, which it views as a proxy force. The U.S., however, maintains that Lebanon is not part of its ceasefire negotiations with Tehran, creating a fundamental mismatch in expectations.
Iranian parliamentary speaker Mohammad Bagher Ghalibaf reiterated on X that the U.S. Must commit to a “comprehensive ceasefire in Lebanon,” while Israel has continued air and ground campaigns in the country despite the temporary truce. Pakistan’s army chief met with Iran’s parliament speaker on Thursday to push for an extension of the pause in fighting that has now lasted nearly seven weeks.
Oil prices reflected the market’s cautious optimism, with Brent crude rising 4.7% to $99.39 a barrel and West Texas Intermediate gaining 2.3%. Prices have swung between $70 and $119 since the conflict began, reacting to fears of prolonged disruption to Gulf shipping lanes.
For more on this story, see Stock Futures Rise as U.S.-Iran War Concerns Ease Slightly.
Behind the rally, corporate earnings have provided real support. PepsiCo rose 2.3% after beating forecasts, driven by snack sales following price cuts on Lay’s, Doritos, Cheetos and Tostitos. J.B. Hunt Transport Services jumped 6.3% and Marsh & McLennan rose 4.4% on better-than-expected results. Taiwan Semiconductor Manufacturing Co. Also reported stronger revenue and profit, with its CFO forecasting continued strength into spring.
Still, not all shared the gains. Abbott fell 6% despite slightly better results, after cutting its full-year profit forecast due to its acquisition of Exact Sciences. Allbirds plunged 35%, and Netflix dropped more than 9% following a weak forecast and the announcement that co-founder Reed Hastings would step down from the board in June.
Liz Ann Sonders, chief investment strategist at Charles Schwab, warned that the market’s advance lacks breadth. “11 days, we got to new all-time highs. There’s nothing wrong with that, but I think we need to see a little bit more participation under the surface to feel some comfort that there is something lasting here,” she said on CNBC. She urged investors to avoid big bets and consider increasing rebalancing frequency to use volatility to their advantage.
This follows our earlier report, U.S. stock futures flat as Trump confirms Israel-Lebanon ceasefire, tech stocks lead rally.
The rally has erased the S&P 500’s losses since the start of the Iran war, but analysts note the advance remains narrow. ING Bank strategists Warren Patterson and Ewa Manthey warned that the “key upside risk for the market is that peace talks between the U.S. And Iran break down,” adding that the gap between the two sides’ demands remains wide.
For now, Wall Street is pricing in a pause, not a peace. Stocks are near record highs, but the market is waiting to see whether recent optimism is grounded in reality or merely reflecting hope that the worst can still be avoided.
Why did stocks rise despite the ceasefire only being temporary?
Investors are reacting to the reduced risk of immediate escalation, even if the truce is short-term, because it lowers the chance of a broader regional conflict that could disrupt oil supplies and global trade.
What is the main obstacle to a lasting U.S.-Iran agreement?
The core disagreement centers on whether Israeli military actions in Lebanon against Hezbollah must cease as part of any deal, with Iran demanding it and the U.S. Excluding Lebanon from its negotiations with Tehran.
