Here's how the US markets, other asset classes are reacting to the fallout in US-Iran negotiations

US stock futures fell on Tuesday, May 2, as uncertainties persisted in US-Iran negotiations, despite claims by President Donald Trump that talks were advancing at a rapid pace. Futures tied to the Dow Jones dropped around 130 points, while S&P 500 and Nasdaq futures declined by 20 and 120 points, respectively. Trump posted on Truth Social that he had spoken to Israeli Prime Minister Benjamin Netanyahu, urging him to halt a planned raid in Beirut, Lebanon’s capital, and that Hezbollah representatives had agreed to stop firing at Israel, with Israel reciprocating. Trump also stated that negotiations with Iran were progressing but provided no further details. However, Israel’s PM Netanyahu contradicted this on X, saying he had warned Trump that Israel would strike terrorist areas in Beirut if Hezbollah continued attacks. Netanyahu added that the IDF would proceed with planned operations in southern Lebanon. Oil prices reacted sharply to the escalation, jumping as much as 7% on Monday. Brent crude peaked at $96 intraday before settling at $95, while West Texas Intermediate traded near $93. Other asset classes showed minimal movement, with the US 10-year bond yield stabilizing at 4.45% after briefly rising to 4.5%. The US Dollar Index held near 99.2, while gold and silver prices remained unchanged. Despite Monday’s volatility, major indices closed at record highs. The S&P 500 surpassed 7,600 for the first time, driven by tech and AI-linked stocks, while the Nasdaq also ended higher. The Dow Jones recovered from intraday lows to close nearly flat. Iran’s decision to halt negotiations followed ceasefire violations, including Israeli actions in Lebanon. Trump’s claims of a temporary truce and diplomatic progress contrasted with Netanyahu’s stance on continued military operations, leaving markets cautious about further instability in the region.