U.S. equity futures posted modest gains late Monday as markets reacted to conflicting reports regarding diplomatic engagement between Washington and Tehran. President Donald Trump asserted that negotiations with Iran were actively underway, describing them as a "last chance" for a deal, while Iranian officials denied any such discussions were planned. The mixed geopolitical signals coincided with a rise in oil prices above $80 per barrel, reflecting ongoing tensions in the Strait of Hormuz region.

The market movement was driven by investor caution following Trump’s comments at an Oval Office event, where he announced he had called off "massive attacks" against Iran in favor of talks. This development came as commodities and equities adjusted to the shifting risk landscape. Asian markets also showed mixed performance, with South Korea’s KOSPI rising 0.77% to 6,305.45, while Japan’s Nikkei 225 slipped 0.20% to 63,624.79.

Market Data Snapshot

All futures data was recorded as of approximately 8:22 p.m. EDT. The U.S. dollar index stood at 99.955, down 0.04% on the day.

Conflicting Diplomatic Signals

The core uncertainty stems from the divergent statements from both governments. Trump told reporters that talks were happening "right now," framing the negotiations as critical for de-escalation. However, Iran’s Foreign Ministry spokesperson Esmail Baghaei explicitly rejected this account, stating that no negotiations with Washington were underway and no meetings had been scheduled. Baghaei added that Iran was not preparing to receive foreign delegations or send negotiators abroad in the coming days.

Trump responded to the denial on Truth Social, accusing Iran’s leadership of being "unbelievably duplicitous." He indicated that additional discussions were expected in the "immediate future," despite the lack of confirmation from Tehran. Iran maintained that its only ongoing discussions involved Oman regarding the management of the Strait of Hormuz.

Strait of Hormuz Tensions Persist

Amid the diplomatic confusion, physical risks in the region remained elevated. The United Kingdom Maritime Trade Operations (UKMTO) reported that a tanker was struck in the Strait of Hormuz early Tuesday local time. The vessel issued a distress call on VHF Channel 16, reporting it had been hit by an "unknown projectile." The incident occurred approximately 20 nautical miles (37 kilometers) northeast of Al Khasab, Oman. The UKMTO did not identify the party responsible for the attack, leaving the source of the projectile unclear.

What the Numbers Show

The modest rise in Dow futures (+0.18%) alongside a more pronounced increase in WTI crude oil (+0.41%) suggests investors are pricing in continued geopolitical risk rather than immediate resolution. The divergence between Trump’s assertion of active talks and Tehran’s firm denial creates a scenario where market participants are likely hedging against both rapid de-escalation and potential renewed conflict. The stability of oil prices above $80 indicates that supply chain concerns in the Strait of Hormuz remain a primary driver for commodity valuations, independent of the diplomatic narrative.

Former Security Adviser John Bolton criticized a new U.S.–Iran memorandum of understanding (MoU), arguing the Trump administration focused on lowering oil prices and restoring shipping through the Strait of Hormuz while overlooking Iran’s nuclear program and regional security threats. Bolton, speaking in an interview with India Today TV and posting on X, called the agreement "terrible diplomacy" and said it tilted heavily in Iran’s favor.

"It’s clear that the only goal for negotiations between the U.S. and Iran was to lower the price of oil," Bolton wrote in a post on X. He added that "the impact of the deal on Iran’s nuclear program and its export of terror worldwide was not considered." Bolton said Washington made "a big mistake" by easing pressure on Iran before fully addressing its nuclear ambitions.

Bolton argued the deal allowed Iran to "pull themselves back together" after military and economic strain, while leaving key concerns unresolved. He said fears over disruptions in the Strait of Hormuz pushed the U.S. toward concessions. "The use of the Strait of Hormuz to threaten the global economy ultimately overwhelmed Trump," he said, adding that the administration prioritized oil prices over broader geopolitical risks.

He warned the agreement could weaken U.S. credibility globally, suggesting adversaries such as China, Russia, and North Korea would view it as evidence of American inconsistency. "I think that’s how it will be read in Beijing and Moscow and Pyongyang," he said.

Key Details of the Dispute

Regional Reactions

On Monday, Iran reaffirmed it would administer the Strait of Hormuz under international law and said the waterway would not return to its pre-war status, even as a U.S. plan allowed temporary Iranian oil exports and joint oversight arrangements under a 60-day framework with Oman. Israel’s Prime Minister Benjamin Netanyahu also pushed for greater military independence, saying Israel must develop its own weapons production capabilities to reduce reliance on the United States amid ongoing tensions with Iran.

Separately, U.S.–Iran talks faced uncertainty after President Donald Trump threatened to take control of the Strait of Hormuz and impose measures over regional tensions. Iranian media reported a temporary protest walkout, while other reports said negotiations continued.