US Stock Futures Rise on Ceasefire Extension as Fed Rate Expectations Limit Gains

US stock index futures moved higher during Tuesday's European trading session after reports that the United States and Iran had agreed to extend their temporary ceasefire, easing immediate geopolitical concerns. However, expectations that the Federal Reserve could keep monetary policy restrictive continued to limit broader market optimism.

Dow Jones Industrial Average futures gained approximately 0.33%, while S&P 500 futures advanced 0.65%. Nasdaq 100 futures outperformed with a rise of about 0.90%, reflecting renewed interest in growth-oriented technology shares following the improvement in market sentiment.

The latest gains followed reports that US and Iranian officials are expected to hold talks in Doha after both sides agreed to extend the interim ceasefire. Investors viewed the development as a potential step toward reducing near-term geopolitical risks, particularly after renewed tensions last week had increased uncertainty across global financial markets.

Despite Tuesday's rebound, investors remain cautious after last week's sharp rotation away from major technology stocks. While the Dow Jones posted modest gains, broader equity benchmarks came under pressure as concerns over higher interest rates weighed on growth sectors. Several large-cap technology companies also experienced notable declines during the period as investors reassessed valuations in a higher-rate environment.

Attention is now shifting toward the US labor market, with June's Nonfarm Payrolls report scheduled for release on Thursday. According to market expectations compiled by Bloomberg, economists forecast job growth of approximately 114,000, while the unemployment rate is expected to remain at 4.3%.

The employment report may provide fresh insight into the Federal Reserve's policy outlook. According to CME FedWatch data, markets continue to assign a relatively high probability that policymakers could deliver another rate increase later this year if economic conditions remain resilient. Stronger-than-expected employment data could reinforce expectations that interest rates may stay elevated for longer, while weaker figures may encourage speculation that inflation pressures are easing, although they could also renew concerns about slowing economic growth.

Key Events to Watch

Doha diplomatic talks (Tuesday)

Investors will monitor developments from negotiations between US and Iranian officials. Any meaningful progress could further improve risk sentiment, while setbacks may increase volatility across energy and equity markets.

US Nonfarm Payrolls (Thursday)

The employment report remains the week's most closely watched economic release. Markets will assess whether labor market conditions continue to support expectations for restrictive Federal Reserve policy.

Technology sector performance

Following last week's broad pullback in large-cap technology shares, investors will watch whether Tuesday's rebound develops into sustained buying interest or remains a short-term recovery ahead of key economic data.