US futures stall as Iran ceasefire hopes ease oil prices ahead of Nvidia earnings

US stock futures traded flat on Tuesday as investors weighed inflation concerns and awaited Nvidia earnings, while also reacting to signs of progress in US-Iran negotiations. President Trump announced he had halted a planned military strike on Iran following appeals from Gulf allies, citing serious negotiations regarding Iran’s nuclear program. This development caused oil prices to fall, with West Texas Intermediate dropping below $103 a barrel. Asian markets showed mixed results, with South Korea’s Kospi sinking over 3% and Japan’s Nikkei 225 losing 0.6%, while Australia’s S&P/ASX 200 rose 0.9%. Market focus also remains on Nvidia’s upcoming earnings report and the potential impact of SpaceX’s initial public offering on Tesla’s valuation.

Dow Jones Industrial Average futures nudged down 0.1%, while contracts on the S&P 500 shed 0.2% and Nasdaq 100 futures fell 0.3%, coming off a second day of losses. The pause in trading activity followed a mixed close on Monday, where rises in oil prices had kept worries about war-stoked inflation alive amid the ongoing halt of tanker traffic through the Strait of Hormuz. Optimism about a resolution crept into markets after President Trump stated that serious negotiations were underway and there was a very good chance of a deal on Iran’s nuclear program.

The diplomatic shift came after leaders of Saudi Arabia, Qatar, and the United Arab Emirates asked the US to hold off on the planned military attack scheduled for Tuesday. Oil prices reacted swiftly to the news, with West Texas Intermediate for July dropping below $103 a barrel after rising 3.3% on Monday. Brent crude closed above $112, having rallied on uncertainty about the talks and the possibility that the near-total closure of the Strait of Hormuz would choke off Persian Gulf energy supplies for longer.

Despite the ceasefire news, gains in Treasury yields were seen as putting appetite for growth stocks at risk, with high-flying AI valuations particularly exposed. The release of Nvidia earnings on Wednesday is the focal point of the week, as investors’ expectations for the world’s most valuable company remain sky high. Nvidia is viewed as a bellwether for the AI trade, which has become increasingly important in propping up markets amid inflation and geopolitical uncertainty.

Attention also turns to the potential impact of SpaceX’s initial public offering on Tesla’s valuation. With the imminent IPO of Space Exploration Technologies Corp, Wall Street pros see investors’ attention and capital inevitably being siphoned away from Musk’s electric-vehicle maker. Portfolio managers note that this cannot be a positive for Tesla, as Musk’s focus will predominantly be on SpaceX, a competition that is reportedly a key reason why Musk is considering merging the two companies.

Asian shares reflected the global uncertainty, with Japan’s benchmark Nikkei 225 losing 0.6% in morning trading to 60,433.79. South Korea’s Kospi sank more than 4% in early trading and was down 3.5% by midday, with shares in Samsung Electronics and SK Hynix slipping as they tracked losses in tech shares overnight. Conversely, Australia’s S&P/ASX 200 added 0.9% to 8,582.80, while Hong Kong’s Hang Seng climbed 0.5%.

Markets are now waiting for further clarity on the negotiations. Trump said the US is prepared to attack if an acceptable deal isn’t reached but didn’t set a deadline. Tehran did not immediately confirm renewed discussions, though investment officers noted that the change of plans highlights how stochastic the situation remains. Investors will likely remain cautious until the outcome of the talks is clearer and Nvidia provides guidance on the health of the AI sector.