Stock futures are pointing to a positive open Monday morning as the ceasefire-driven rally that closed out May carries into the new month. S&P 500 futures are up 0.6%, Nasdaq-100 futures are ahead 0.8%, and Dow futures are gaining 210 points. The momentum follows Friday sharp rally that pushed the S&P 500 to its best weekly performance in three months.
Here is what is driving the action: The US-Iran ceasefire framework announced late Friday is the big macro catalyst. Traders are pricing in lower geopolitical risk premiums across equities, especially in sectors that got hammered by the conflict premium — airlines, shipping, and consumer discretionary. The VIX, which spiked above 28 in mid-May, fell back below 19 over the weekend, signaling a broad risk-on shift.
On the data side, it is a light morning. The final May Manufacturing PMI prints at 9:45 AM ET, with economists expecting a 50.4 reading. The ISM Manufacturing PMI follows at 10:00 AM — street consensus is 49.6, still in contraction territory but improving from April 49.2. Construction spending data rounds out the calendar at 10:00 AM. None of these are likely to hijack the narrative unless they surprise hard.
Bond yields are steady this morning with the 10-year Treasury hovering around 4.38%. Oil slide below 5 is taking pressure off inflation expectations and giving the Fed some breathing room. The crypto crowd is also getting in on the action — Bitcoin briefly touched 7,000 overnight before settling around 5,800.
Here is the bottom line: This is a textbook ceasefire rally — risk-on, rates-down, oil-down, cyclicals-up. But the question for this week is whether the macro data (ISM, Friday jobs report) validates the optimism or introduces a new round of uncertainty. Watch the open for breadth — if small caps lead, that is a signal this run has legs.
