Wall Street futures pointed to a modestly higher open on Tuesday as investors digested the latest twist in the diplomatic standoff over the Strait of Hormuz. The S&P 500 had slipped 0.06% to 7,753.11 on Monday, the Nasdaq Composite fell 0.32% to 26,605.36, and the Dow Jones Industrial Average lost 0.11% to close at 53,975.98, pulling back from the record highs set late last week.
The session's dominant driver was a sharp rebound in oil prices after hopes for a swift US-Iran accord faded. Brent crude futures surged roughly 5% to settle at $87.72 a barrel, while West Texas Intermediate climbed about 5.1% to $82.13, the highest levels in weeks. The move reintroduced inflation concerns just days before the July consumer price index report, which economists forecast at 3.4% year-over-year.
Diplomatic momentum stalled over the weekend. Iran laid out six conditions for reopening the Strait of Hormuz, including a full US military withdrawal, the lifting of all sanctions, and war reparations. President Trump countered by demanding compensation from Iran for what he described as 50 years of damages, including the deaths of US personnel and Iranian protesters, and said the claim would be inserted into all future negotiations.
Iranian Foreign Minister Abbas Araghchi stated there was "no possibility of restarting negotiations" unless Washington addressed its violations of the June memorandum, while the Iranian Foreign Ministry clarified that current talks involve only Oman and focus on a temporary shipping lane.