U.S. stock index futures surged sharply on Monday evening local time, driven by a decline in oil prices and rising market expectations that a resolution to the U.S.-Iran conflict may be near. Futures for the Dow Jones Industrial Average jumped 441 points, a gain of 0.9%. S&P 500 futures rose 0.9%, while Nasdaq 100 futures climbed 1.2%. U.S. stock markets were closed on Monday for the Memorial Day holiday. President Donald Trump stated on Monday that negotiations with Iran aimed at ending the conflict were "progressing well." However, he also warned that the U.S. might take offensive action if the talks break down. Following Trump's remarks, crude oil prices fell sharply. West Texas Intermediate (WTI) crude futures dropped approximately 6%. Last week, the S&P 500 gained 0.9%, marking its longest weekly winning streak since late 2023. The Dow Jones Industrial Average rose 2.1%, recording its third weekly gain in the past four weeks. The Nasdaq Composite increased by 0.5%, marking its seventh weekly advance in the past eight weeks. Adam Parker, founder of Trivariate Research, noted, "There is no question that fundamentals have driven at least part of this market rally. Earnings are projected to grow 23% this year and 16% next year, providing a solid rationale for believing that forward price-to-earnings ratios have actually been contracting modestly, even as earnings estimates are revised upward and actual growth remains robust." The decline in oil prices also contributed to the stock market's strength last week. U.S. crude oil futures fell 8.4% for the week, their worst weekly performance since the week of April 17. However, with crude prices still significantly higher than at the start of the year and inflationary pressures remaining elevated, investor expectations for accommodative policy from the Federal Reserve have cooled. In fact, according to the CME Group's FedWatch tool, traders are currently pricing in an 8.5% probability of a rate hike in July, compared to just 0.9% a month ago.