US stock futures pointed to a mixed opening on Tuesday, with the Dow Jones and S&P 500 edging lower while the Nasdaq 100 rose. This follows President Donald Trump’s denial of reports offering Iran sanctions relief, which he labeled a "HOAX."

Trump explicitly rejected claims that he proposed economic relief or access to frozen funds in exchange for nuclear concessions, stating, "I offered them NOTHING!" Former Secretary of State Antony Blinken countered that the reported proposal closely resembled the Obama-era nuclear deal, arguing that tearing up the previous agreement contributed to current regional instability.

Diplomatic stalemate and market reaction

The diplomatic push follows Trump’s rejection of Iran’s latest proposal, where he stated Tehran had "overplayed their hand." U.S. envoys Steve Witkoff and Jared Kushner held indirect talks with Iranian Foreign Minister Abbas Araghchi in New York last week, with Qatari officials carrying messages between the two sides. A White House official described these discussions as "positive and constructive," noting flexibility from Iran on nuclear issues.

Significant divisions remain regarding the sequence of actions. Iran seeks sanctions relief and access to frozen assets before making major concessions, while the Trump administration demands concrete nuclear progress first. U.S. Ambassador to the United Nations Mike Waltz stated that Iran was asking for "everything up front with a promise that they would then talk."

Prediction market traders are becoming more optimistic about a resolution. Polymarket now assigns a 15% chance to a final U.S.-Iran nuclear deal by December 31, up from 10% on Saturday. The wider market has attracted nearly $18.9 million in trading volume. However, skepticism persists regarding major nuclear concessions, with just a 6% chance that the U.S. obtains Iran’s enriched uranium by year-end.

Stock market performance

U.S. stocks look set for a mixed session following Monday’s lower close. The SPDR S&P 500 ETF Trust (NYSE: SPY) was down 0.038% at $765.32, while the Invesco QQQ Trust ETF (NASDAQ: QQQ) advanced 0.12% to $737.44 in premarket trading.

Key movers included Nvidia Corp. (NASDAQ: NVDA), which rose 0.94% after announcing a $150 billion share repurchase authorization increase. AAR Corp. (NYSE: AIR) gained 4.21% on better-than-expected first-quarter results. Conversely, Vail Resorts Inc. (NYSE: MTN) fell 1.84% after reporting mixed fourth-quarter results.

Energy markets and interest rates

Oil prices remained elevated amid ongoing indirect negotiations. Brent crude gained 1.5% Sunday night after Trump rejected Iran’s proposal, as disruption around the Strait of Hormuz continues to pressure global energy markets. Crude Oil WTI futures edged higher in the early New York session, rising 0.08% to hover around $92.67 per barrel. Shares of Exxon Mobil Corp. (NYSE: XOM) were up about 1% Monday as oil prices remained elevated.

On the economic front, the 10-year Treasury bond yielded 5.24%, and the 2-year Treasury bond yielded 4.94%. The CME Group’s FedWatch tool projections show markets pricing in a 72.5% likelihood of the Federal Reserve hiking interest rates after its October meeting. BlackRock’s weekly commentary noted that expectations for further Fed tightening may be overstated, viewing a potential rate hike alongside stronger economic growth as net good news for risk assets.

What the numbers show

The divergence between the rising probability of a general deal (15%) and the low probability of obtaining enriched uranium (6%) suggests traders anticipate a partial or phased agreement rather than comprehensive nuclear disarmament. Simultaneously, the 72.5% probability of a Fed rate hike contrasts with BlackRock’s view that tightening fears are misplaced, highlighting a disconnect between market pricing and institutional outlooks regarding monetary policy.

Iran’s Supreme Leader Ayatollah Mojtaba Khamenei declared on Monday that enemy forces do not dare enter the Gulf and that the Arabian Sea would soon be cleared of enemies. He stated that Tehran’s adversaries would eventually be kicked out of the Middle East amid the ongoing war with Iran.

Khamenei's statement on regional waters

Khamenei made the assertion regarding what he described as "enemy forces," stating that such forces do not dare enter the Gulf. In a post on the social media platform X, he said that the enemies had suffered from "painful blows" by "the valiant [Iranian] fighters" and the "guardians" of the Strait of Hormuz.

He added that because of this, "they dare not advance beyond the Arabian Sea." Khamenei further claimed that "it won’t be long before the Arabian Sea rids itself of their presence too." The remarks reflect the Iranian leadership's position on the presence of foreign military forces in the region's strategic waterways, which include the Gulf and the Arabian Sea.

U.S. Marines sustain injuries in Strait of Hormuz strikes

On Sunday, NBC News reported that eight U.S. Marines had suffered from smoke inhalation and possible head trauma, exhibiting symptoms like concussions and headaches, but did not suffer serious injuries. The report cited comments from three unnamed U.S. officials.

The officials declined to comment on what type of ship the Marines were on but confirmed that they were not on board a U.S. Navy vessel. The attack has not been reported previously. Notably, the Islamic Revolutionary Guard Corps (IRGC) said that it had struck two U.S. vessels, as well as eight oil tankers in the Strait of Hormuz earlier this month. However, the claims were denied by the U.S. Central Command (CENTCOM).

Diplomatic developments and oil market impact

Former Secretary of State Antony Blinken weighed in on President Donald Trump's reported offer for a deal with Iran, saying that Trump's offer for sanctions relief and access to frozen funds echoed former President Barack Obama's Iran Nuclear deal in 2015. On the other hand, Iran's Parliament Speaker Mohammad Bagher Ghalibaf reaffirmed Tehran's control over the Strait of Hormuz, saying that customers were paying up to $50 in premiums to source oil ever since the war began in February 2026.

The West Texas Intermediate (WTI) crude futures contracts expiring in November rose 0.75% to $93.28 at press time. Brent futures contracts expiring in November were up 0.59% to $98.41 at the time of writing this article. The United States Oil Fund (NYSE: USO) ETF was up 0.05% at $150.08, while the ProShares Ultra Bloomberg Crude Oil (NYSE: UCO) ETF gained 0.53% to $53.39.

On the fuel costs front, gas prices in the U.S. have surged in the past weeks. Data from the American Automobile Association (AAA) showed that the national average price of gas fell slightly to $4.4768/gallon on Monday. Meanwhile, diesel prices also declined to $6.45311/gallon on Monday.