NEW YORK (VINnews) – Stock futures jumped sharply Monday night as oil prices plunged amid growing hopes that a diplomatic resolution to the U.S.-Iran conflict may be near.

Dow Jones Industrial Average futures rose 441 points, or 0.9%. S&P 500 futures gained 0.9%, and Nasdaq-100 futures climbed 1.2%. U.S. stock markets were closed Monday in observance of Memorial Day.

President Donald Trump said Monday that negotiations with Iran to end the war were “proceeding nicely,” though he cautioned that the U.S. could take offensive action if talks collapse.

Crude oil prices dropped sharply following Trump’s remarks. West Texas Intermediate futures fell about 6%.

The positive sentiment extended last week’s gains for major indexes. The S&P 500 rose 0.9% last week, marking its longest weekly winning streak since late 2023. The Dow Jones Industrial Average climbed 2.1%, its third weekly gain in four weeks. The Nasdaq Composite advanced 0.5%, its seventh gain in eight weeks.

“There is no doubt that fundamentals are at least partially responsible for the market rally,” wrote Adam Parker, founder of Trivariate Research. “With earnings projected to grow 23% this year, and 16% next year, there’s a credible argument to make that despite the increasing projections for earnings, and strong earnings growth, the price-to-forward earnings has been modestly contracting.”

A decline in oil prices also supported equities last week, with U.S. crude falling 8.4% — its worst weekly performance since April 17.

However, oil prices remain well above levels seen earlier this year, and persistent inflationary pressures have cooled expectations for Federal Reserve rate cuts. Traders are now pricing in an 8.5% chance of a rate hike in July, up from 0.9% a month ago, according to CME Group’s FedWatch tool.