Stock futures rose Tuesday as traders weighed the prospects of a potential U.S-Iran deal being reached to end the war. Dow Jones Industrial Average futures popped 234 points, or 0.5%. S&P 500 futures gained 0.7%, and Nasdaq-100 futures advanced 1.1%. U.S. stock markets were closed Monday due to the Memorial Day holiday. President Donald Trump said Monday that talks with Iran to end the war were “proceeding nicely.” That said, he did warn the U.S. could go on the offensive if negotiations break down. On top of that, the U.S. said it conducted “self-defense” strikes in southern Iran early Tuesday. Some of those targets included missile launch sites and Iranian boats attempting to place mines, U.S. Central Command spokesman Tim Hawkins said. He added that the U.S. used “restraint during the ongoing ceasefire” between the two countries. “The consensus view still assumes there will be some type of a détente formally reached within the next few days between Washington and Tehran, which means the real question is how much of this is already priced in,” wrote Adam Crisafulli of Vital Knowledge. The S&P 500 climbed 0.9% last week to notch its longest weekly winning streak since late 2023. The Dow climbed 2.1%, marking its third weekly gain in four weeks. The Nasdaq rose 0.5% last week, its seventh 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 boosted equities last week. U.S. crude lost 8.4%, marking its worst week since April 17. However, with crude still trading well above the levels seen earlier in the year—and price pressures remaining elevated—investor expectations for easier Federal Reserve policy have been tempered. In fact, traders are pricing in an 8.5% chance of a rate hike in July, up from 0.9% a month ago, according to the CME Group’s FedWatch tool. Treasury yields fell on Tuesday as bond markets returned from a Memorial Day break to bolstered hopes of a Middle East peace deal, even as the U.S. military conducted fresh strikes on Iran. The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — fell more than 6 basis points to 4.510%. The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, fell more than 6 basis points to 4.066%. The longer-dated 30-year Treasury bond yield fell more than 5 basis points to 5.028%. South Korea’s Kospi hit a fresh record Tuesday as trading resumed after a public holiday, with investor sentiment supported by hopes for a breakthrough in the U.S.-Iran peace talks. South Korea’s Kospi was 2.55% higher at 8,047.51 after rising to a record high of 8,131.15 in intraday trade. The small-cap Kosdaq pared gains, ending 0.98% higher. Japan’s Nikkei 225 ended Tuesday’s session 0.25% lower at 64,996.09 amid some profit-taking, while the Topix was marginally lower at 3,938.46. The Nikkei 225 breached 65,000 for the first time Monday in holiday-thinned Asia trading. Australia’s S&P/ASX 200 fell 0.39% at 8,657.80. China’s CSI 300 gained 0.53% at 4,947.85, while Hong Kong’s Hang Seng was flat in choppy trade following a public holiday on Monday. India’s Nifty 50 slipped 0.23%, while the BSE Sensex declined 0.28%. Brent crude oil rose Tuesday as U.S. military operations in southern Iran and President Donald Trump’s mixed messaging on the negotiations between Tehran and Washington kept traders on edge. July futures for international benchmark Brent crude gained 3.4% to $99.39 a barrel by 10:45 a.m. in London (5:45 a.m. ET), while U.S. West Texas Intermediate futures for July were trading 3.9% lower at $92.85 per barrel compared with Friday’s close. There was no WTI price settlement on Monday due to the U.S. Memorial Day holiday.