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Progress on Potential Middle East Peace Agreement Drives US Equity Futures Higher Pre-Bell

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US equity futures were edging higher pre-bell Tuesday as traders monitored the US-Iran situation for a potential peace agreement to end the Middle East war.

Dow Jones Industrial Average futures were 0.5% higher, S&P 500 futures were up 0.7%, and Nasdaq futures were 1.1% higher.

US Secretary of State Marco Rubio said that negotiations could "take a few days." Both sides said they have made progress on a potential memorandum of understanding that would end the war and provide 60 days for negotiators to reach a final deal.

The framework of the memorandum is focused on halting the war and the US naval blockade in exchange for Iran ensuring safe transit in the Strait of Hormuz, according to Iranian foreign ministry spokesperson Esmaeil Baghaei.

Traders observed the latest round of earnings, with AutoZone (AZO) reporting an increase in fiscal Q3 net income and net sales.

Oil prices were mixed, with front-month global benchmark North Sea Brent crude up 3% at $96.22 per barrel and US West Texas Intermediate crude 3.9% lower at $92.84 per barrel.

The Chicago Federal Reserve Bank's monthly National Activity Index rebounded to a reading of 0.14 in April from negative 0.15 in March, compared with expectations for a smaller gain to negative 0.03 in survey of analysts compiled by Bloomberg as of 7:30 am ET.

The March S&P Case-Shiller home price index is scheduled for release at 9 am ET. The May consumer confidence index, due at 10 am ET, is projected to fall to 92.0 from 92.8.

In other world markets, Japan's Nikkei closed 0.3% lower, Hong Kong's Hang Seng ended flat, and China's Shanghai Composite finished 0.2% lower. Meanwhile, the UK's FTSE 100 was up 0.5% and Germany's DAX index was 0.4% lower in Europe's early afternoon session.

In equities, Eli Lilly (LLY) shares were up 1.2% after the company said its experimental gene-editing therapy, VERVE-102, reduced LDL cholesterol and PCSK9 protein levels in a phase 1 study involving adults with heterozygous familial hypercholesterolemia or premature coronary artery disease. BHP Group (BHP) stock was 1.4% higher after a Guardian report that the company scrapped plans for an iron ore processing facility near its Jimblebar mine in Western Australia that was expected to improve ore quality and lower emissions.

On the losing side, energy majors ExxonMobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY) saw their shares decline after oil prices fell below $100 for the first time in weeks. ExxonMobil shares were down 1.1%, Chevron stock was 1.2% lower, and Occidental Petroleum shares also fell 1.2%.

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Germany's DAX Extends Rally on US-Iran Deal Hopes; Delivery Hero Jumps

The German blue-chip DAX index extended its gains at the start of a new trading week, closing 2.01% higher on Monday, buoyed by US-Iran deal optimism.Speaking in Tehran, Iranian Foreign Ministry Spokesperson Esmail Baqai acknowledged media reports of progress in talks with the US, saying the parties have "reached a conclusion on a large portion of the issues under discussion," but cautioned that an agreement is not "imminent." Earlier, US Secretary of State Marco Rubio issued a similar cautionary statement in New Delhi, India, telling reporters not to "read too much into it." Rubio's comments followed US President Donald Trump's directive to negotiators not to rush the process."We've been at this stage before, only for talks to break down. Therefore, the market will likely be more cautious about overreacting to these headlines. There also appears to have been some tempering of optimism. Trump has since said he's in no 'rush' for a deal and that it 'isn't even fully negotiated yet'. The US suggests that any final deal could take several days. Meanwhile, local Iranian media claims that the US is still blocking some key Iranian demands. Obviously, the big unknown is how the US and Iran will resolve their differences on Iran's nuclear programme," ING analysts said.Still, the news of a potential deal sent oil prices lower, with the Brent crude futures down nearly 6% to $98 a barrel, which in turn fueled a rally in the European travel and leisure sector. Aircraft engine manufacturer MTU Aero Engines (MTX.F) was DAX's top-performing stock at 6.11% in the green, while Airbus' (AIR.F) German stock gained 2.79%.Back in Europe, market watchers are awaiting key data this week, including the euro area's latest consumer confidence report on Thursday and preliminary May inflation print in Germany and the wider eurozone due on Friday. Germany's April import prices and May unemployment figures will also be released on Friday.In corporate news, Delivery Hero (DHER.F) surged 11.94% on Xetra, after London's Financial Times reported that Uber is considering raising its takeover offer for the German online food delivery company. Citing three people familiar with the matter, the report noted that Uber's board discussed a higher offer after a major shareholder rejected a 38-euro-per-share bid, equivalent to a valuation of more than 11.5 billion euros. Delivery Hero confirmed a baseline proposal of 33 euros per share in a May 23 release.

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UAE Shares Close Higher Ahead of Eid Holidays as US-Iran Deal Hopes Lift Sentiment

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US Equity Indexes Rise, Crude Oil Off Session Highs as Iran Peace Talks Press Ahead

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