US stocks-Wall St futures gain as pause in US-Iran hostilities lifts sentiment

Markets ended last week rattled by escalating Middle East tensions, with investors worried the conflict could fuel further price pressures ahead of the Fed's monetary policy decision due on Wednesday.

Despite the announcement of the pause in attacks, shipping through the crucial Strait of Hormuz remained low. Attacks by Yemen's Iran-aligned Houthis on Saudi oil installations along the Red Sea coast, another waterway vital to the global oil trade, also kept traders on edge.

The Fed has offered few clues on monetary policy outlook since Kevin Warsh took over as chair, fueling uncertainty over the path ahead for interest rates.

Investors are pricing in at least 25 basis points worth of rate hikes this year, with a 31% chance it could come as early as this week, LSEG-compiled data showed.

Data on June durable goods is expected later on Monday and the Personal Consumption Expenditures Price Index is due a day after the central bank's decision. The Fed's preferred inflation gauge will likely play a key role in shaping market expectations for interest rates later this year.