US stock futures rise in June as oil slips below $100

Futures extend May momentum

Wall Street entered June with momentum after a strong May rally pushed major indices close to record highs. US stock futures moved higher in overnight trading, keeping risk appetite intact despite elevated valuations. The S&P 500, Nasdaq, and Dow Jones ended May with solid gains, giving investors confidence into a week expected to be heavy on economic updates. Market tone was helped by the view that geopolitical tensions in the Middle East may not escalate further. Investors also took comfort from a drop in crude prices from recent peaks.

AI remains the key driver for US equities

Artificial Intelligence continued to be described as the biggest force behind the rise in US markets. Investors have been allocating capital to semiconductor companies, cloud computing firms, AI infrastructure providers, and data center and networking businesses. This demand has supported technology stocks and helped the Nasdaq outperform broader markets. The narrative has been reinforced by indications that major companies are still increasing AI spending. Brokerage Vested Finance said semiconductor stocks were still leading, with investors betting demand for AI chips will remain structurally strong.

Earnings season supports valuations

Corporate earnings were reported to be significantly better than expected, giving markets another pillar of support. Around 85% of S&P 500 companies have beaten analyst estimates. Profit growth was said to be above historical averages. Companies have beaten earnings forecasts by nearly 16.7%, more than double the long-term average surprise. This earnings strength has helped justify high market valuations and reduced immediate concerns about a sharp slowdown in growth.

Middle East risk premium eases, oil volatility cools

A key swing factor for sentiment has been the market’s assessment of Middle East risks and the impact on oil supply. Investors were increasingly pricing in the possibility that tensions will not broaden into a wider conflict. The article cited a 60-day understanding between the US and Iran to extend ceasefire efforts and expectations that diplomatic engagement would continue. Reduced fears of major disruptions to global oil supplies improved sentiment across risk assets.

Oil prices were still described as elevated, but crude recorded its sharpest monthly decline since April 2025 during May. The moderation in oil volatility was framed as helpful on three fronts: easing inflation concerns, supporting corporate profitability assumptions, and keeping alive expectations for future Federal Reserve rate cuts.

Bonds: yields fall as markets reassess risk

Bond markets reflected the same shift in risk pricing. The benchmark 10-year US Treasury yield declined to 4.558%, while the 30-year Treasury yield slipped to 5.064%. Falling yields can make fixed income relatively less attractive, which can support equities at the margin. At the same time, the article noted that the market picture remained mixed because energy prices can still reintroduce macro risks.

India opens strong: Sensex and Nifty jump

Indian equity benchmarks tracked the improved global tone. Sensex and Nifty opened sharply higher on Monday, rising over 1% each as hopes around a US-Iran peace understanding and falling crude lifted sentiment. At 10:26 am, Sensex was up more than 900 points at 76,294, while Nifty 50 rose 242 points to 23,961.

The piece also tied the move to broader risk-on cues globally, with Wall Street ending the previous session in the green and Dow Jones futures up around 1% on Monday morning. The rally in India was accompanied by a rise in the rupee and a fall in bond yields, consistent with the day’s risk appetite.

Rupee strengthens as crude dips

The Indian rupee opened 0.37% higher to a two-week high of 95.34 per US dollar, versus the previous close of 95.69. The rupee move was linked to easing crude concerns and improved risk sentiment.

Crude was reported to have dipped by $1 to below $100 a barrel on expectations that the US and Iran were close to a deal. Lower oil prices are typically positive for India because the country imports a large share of its crude needs. That channel matters for inflation expectations and corporate costs, especially when global energy volatility has been a key macro driver.

Tariffs and trade: another global tailwind

Apart from geopolitics and earnings, trade headlines featured as an additional support for markets. The article said Dalal Street was set to open higher after a key ruling by the US Supreme Court that struck down sweeping tariffs imposed by US President Donald Trump under emergency powers. The decision was framed as significant for global trade and the wider economy.

Separately, a Reuters report dated Feb 9 said Indian stock markets were set for a favourable opening as investors assessed the effects of a provisional trade agreement framework between India and the US. Under the framework, the United States would lower tariffs on Indian products such as textiles, apparel, leather, and footwear to 18%. In return, India would reduce or eliminate tariffs on US industrial goods and decrease duties on a broad range of US agricultural and food items.

Another update said Trump announced that India and the US agreed on a trade deal after his conversation with Prime Minister Narendra Modi, including cutting tariffs on Indian goods from 25% to 18% and waiving reciprocal 25% tariffs linked to India’s purchase of Russian crude. The report also said Trump’s tariffs on India would fall sharply from 50% to 18% once implemented, while India would cut tariffs and non-tariff barriers on US goods to zero.

What to watch: oil shocks and recent volatility

Despite renewed optimism, the article flagged that caution was still warranted. It referenced a period of sharp correction in US markets tied to an oil shock, with Brent crude above $115 per barrel and a war high of $118.5. In that phase, Dow and Nasdaq were described as down 10% from the highs, and the S&P 500 down 9%. The contrast highlights how quickly sentiment can swing when energy prices jump.

Key numbers at a glance

Conclusion

June began with US futures firmer after May’s rally, supported by AI-led technology strength, better-than-expected earnings, and signs of easing Middle East risk that helped bring crude below $100. Indian markets reflected the same tone, with Sensex and Nifty jumping over 1% and the rupee strengthening. The next directional cues remain linked to confirmed developments on geopolitics, oil price stability, and the follow-through on trade and tariff decisions already announced.