U.S. stock futures rose modestly Monday as investors weighed diplomatic signals of a potential cease-fire in the Iran conflict, even as persistent jet fuel shortages and elevated oil prices continued to pressure airlines and energy-dependent sectors.

FTSE 100 Surges 0.8% Today as Oil Eases and Markets

Shortly after 6:40 a.m. ET, Dow Jones Industrial Average futures were up about 106 points, or 0.23%, at 46,735. S&P 500 futures gained 34.25 points, or 0.52%, to 6,638, while Nasdaq-100 futures climbed 214.25 points, or 0.89%, to 24,344. The moves followed a holiday-shortened week in which major indexes posted mixed results amid geopolitical uncertainty.

The cautious optimism stemmed from reports that the Trump administration is pushing for a potential 45-day cease-fire with Iran. President Donald Trump has signaled progress in talks, including productive discussions that could ease tensions in the Middle East. Such developments have periodically lifted sentiment in recent weeks, even as the effective closure of the Strait of Hormuz continues to disrupt global energy supplies.

Oil prices remained volatile. Brent crude traded near $108 per barrel, while U.S. West Texas Intermediate hovered around $110-$114 in recent sessions. The conflict has driven jet fuel prices to more than double pre-war levels in some markets, prompting airlines to cancel thousands of flights and raise fares. United Airlines announced modest capacity cuts, while international carriers including Scandinavian Airlines and Air New Zealand have slashed hundreds of services.

"Jet fuel prices have more than doubled in the last three weeks," United CEO Scott Kirby noted in recent remarks, warning of an extra $11 billion in annual costs if levels persist. The energy shock has rippled through markets, boosting shares of oil producers while weighing on transportation and consumer discretionary stocks.

The broader market context includes lingering effects from the Iran war that began escalating in late February. U.S. and Israeli strikes prompted Iranian retaliation, severely limiting tanker traffic through the Strait of Hormuz, which handles about one-fifth of global seaborne oil trade. This has led to physical shortages of refined products, particularly jet fuel and diesel, with Asia already rationing supplies and Europe facing potential constraints by May.

Despite the headwinds, some analysts see signs of stabilization. Diplomatic efforts, including involvement from regional players like Oman, have raised hopes that shipping lanes could reopen, easing supply crunches. The International Energy Agency warned that April could bring even tighter conditions than March unless transit resumes.

Wall Street's performance last week reflected this uncertainty. The S&P 500 eked out marginal gains in a shortened trading period, while the Nasdaq showed relative strength on technology resilience. The Dow closed near 46,500 in recent sessions. Year-to-date, major indexes remain in positive territory but have faced repeated tests from energy volatility.

Sector rotation has been evident. Energy stocks have benefited from higher crude prices, with some producers posting gains. Conversely, airline shares have struggled, extending year-to-date losses as fuel costs erode margins. Delta Air Lines, American Airlines and United have all seen pressure, with some carriers introducing fuel surcharges and baggage fee increases.

Technology and growth stocks in the Nasdaq have offered a buffer, supported by artificial intelligence enthusiasm and expectations of resilient corporate earnings. However, broader economic concerns linger, including potential impacts on consumer spending from higher gasoline prices, now averaging over $4 per gallon nationally.

Federal Reserve officials have monitored the situation closely. While inflation risks from energy costs could complicate rate decisions, many economists believe the central bank retains flexibility if the conflict de-escalates. Treasury yields have hovered around recent levels, with the 10-year note near 4%, as investors balance growth fears against sticky inflation.

Global markets showed mixed signals Monday. Asian stocks edged higher on cease-fire optimism, while European futures were little changed ahead of the open. Canada's TSX futures also ticked up as investors assessed U.S.-Iran peace proposals.

Looking ahead, this week features limited major economic data, but focus remains on any developments from the Middle East. Earnings season continues with select reports, though many companies have already guided on potential energy cost impacts.

Market strategists offer varied outlooks. Some see the current environment as a buying opportunity if diplomacy advances, citing historical patterns where geopolitical shocks eventually fade. Others warn of prolonged volatility if the Hormuz disruption extends, potentially tipping economies toward stagflation in import-dependent regions.

"Peak uncertainty may be behind us if talks progress," one research firm noted, suggesting a possible shift in market psyche. Still, physical shortages of refined products create a "Wile E. Coyote" dynamic, where spot prices diverge sharply from futures, signaling real-world supply stress.

Individual investors have shown resilience, with retail participation remaining active via platforms tracking futures and options. Prediction markets on platforms like Robinhood have seen activity around S&P 500 and Nasdaq-100 settlement levels for April 6, reflecting trader bets on near-term direction.

Corporate America continues adapting. Companies with international exposure have hedged fuel costs where possible, but smaller operators face greater challenges. Travel demand has shown some softening on long-haul routes, though domestic leisure travel has held up better.

The aviation sector's woes highlight broader vulnerabilities. With summer travel season approaching, further cancellations could dampen economic activity in tourism-heavy areas. Some carriers have shifted to more fuel-efficient aircraft and shorter routes to mitigate costs.

Energy analysts expect the supply crunch to intensify without resolution. Strategic reserves in some countries are being drawn down, but global refining capacity for jet fuel remains constrained. Asian nations, heavily reliant on Middle Eastern crude, have imposed price caps and conservation measures.

In the U.S., domestic production provides a partial buffer, but imported refined products and global price transmission still affect costs. Refineries have prioritized certain outputs, contributing to the jet fuel premium.

As trading begins Monday, volume may start light following the Easter weekend, with full participation expected as the week progresses. Any concrete cease-fire announcement could trigger a sharper rally, while renewed escalation threats might reverse gains quickly.

Wall Street has demonstrated remarkable swings in recent weeks. Futures have surged on de-escalation rumors only to retreat on fresh threats or supply data. This pattern underscores the market's sensitivity to headlines from the region.

For individual sectors, defense and cybersecurity names have seen sporadic interest amid geopolitical risks. Conversely, consumer staples and utilities have offered defensive appeal.

Longer-term investors are advised to maintain diversification. While energy volatility dominates short-term narratives, underlying U.S. economic fundamentals — including a still-solid labor market and corporate balance sheets — provide support.

The VIX, Wall Street's fear gauge, has moderated from peaks seen during the initial war escalation but remains elevated compared to pre-conflict norms, indicating lingering caution.

Monday's futures movement suggests a tentative risk-on tone driven by cease-fire hopes. Whether that holds through the session will depend on any fresh updates from Washington or Tehran.

As the Iran conflict enters a new phase of diplomatic maneuvering, markets will continue parsing signals for clues about energy flows and economic ripple effects. For now, stock futures reflect guarded optimism that the worst of the supply shock may prove temporary.