New Delhi, July 28 -- Wall Street looks primed for another set of solid Monday gains, boosted by easing tensions in the Middle East, a big decline in oil prices and optimism that the Federal Reserve will hold its key interest rate steady throughout the summer months.

But that bullish narrative, put in place by weekend developments that suggest nascent peace talks between Washington and Tehran and the pausing of hostilities following two straight weeks of attacks, belies a market that continues to reset at weaker levels heading into the traditional August lull.

The S&P 500, which is down more than 2.2% since the start of the second quarter, has been locked in a tight trading range of around 7500 points since the middle of May and has fal...