U.S. stock index futures are trading slightly higher, while Treasuries have pared their losses. A growing sense of optimism that the United States and Iran could reach an agreement has pushed crude oil prices, which had been rising, into a decline. As of 7:27 a.m. in New York, S&P 500 futures were up 0.2%, Nasdaq 100 futures had gained 0.4%, and Dow Jones futures were 0.1% higher. The yield on the 10-year U.S. Treasury note was broadly unchanged at 4.71%.

Brent crude reversed its earlier gains, falling 0.4% to around $87 per barrel. Risk appetite was boosted by comments from the Pakistani Defence Minister, who stated that recent signals suggest the U.S. and Iran are "close to some kind of arrangement." This comes after President Trump presented a new set of comprehensive demands to Iran, which had dampened hopes for a deal that could reopen the Strait of Hormuz.

Beyond the Middle East situation, investors are also awaiting the release of the U.S. Consumer Price Index on Wednesday for fresh clues on the Federal Reserve's interest rate path. Weaker-than-expected employment data released last Friday has reduced bets on an immediate rate hike by the Fed.

Data tracked by Bloomberg Intelligence shows that profits for S&P 500 index constituents are expected to grow by approximately 32% year-over-year in the second quarter, following a 30% jump in the first quarter. Profit growth is also projected to exceed 20% for the next two quarters. Strategists at Bank of America, led by Savita Subramanian, noted that such sustained strong earnings growth is rare, having occurred only 10 times since 1936. Meanwhile, strategists at Barclays stated that despite volatility, spending related to artificial intelligence will continue to support corporate earnings. The bank expressed a preference for U.S. growth stocks and large-cap stocks.