U.S. equity futures were little changed early Wednesday as traders tracked tentative diplomatic progress between Washington and Tehran and prepared for a heavy slate of corporate earnings, especially from major banks.
By 03:28 ET (07:28 GMT), contracts linked to the Dow Jones Industrial Average, S&P 500 and Nasdaq 100 were flat. The S&P 500 ended Tuesday just below a record high, while the Nasdaq Composite has climbed 14% over the past 10 sessions, its longest winning streak since 2021, even as Middle East tensions disrupted shipping through the Strait of Hormuz.
Oil prices, which had surged on supply concerns, hovered below $100 a barrel as signs of easing tensions emerged. Brent crude futures were up 0.3% at $95.10 a barrel at 03:16 ET, while U.S. West Texas Intermediate slipped 0.2% to $91.12. The dollar index edged back toward pre-conflict levels, pointing to a normalization in currency markets.
Roughly one‑fifth of global oil supply still moves through the Gulf’s constrained corridor, and prices remain above early‑year averages. A U.S. waiver that had allowed some Iranian oil exports expires this week and will not be renewed. A similar waiver for Russian crude ended last weekend, raising the prospect of tighter supply over the coming weeks.
Washington–Tehran talks ease some energy concerns
President Trump said peace talks with Iran could resume within two days after an initial round held in Pakistan over the weekend. Vice President Vance, who led the U.S. delegation, said the negotiation framework remains intact.
U.S. forces continue to enforce a blockade of Iranian ports, effectively freezing maritime trade since restrictions were introduced earlier in the week after the first talks failed to produce a ceasefire. Shipping data, however, showed more than 20 commercial vessels recently transiting the Strait of Hormuz, suggesting a modest improvement in flows and helping remove part of the geopolitical risk premium in oil.
The combination of slightly lower Brent prices and narrowing war-related risk in the dollar points to a calmer backdrop for energy markets, though traders remain alert to any breakdown in negotiations.
Wall Street focuses on bank earnings and trading activity
Attention on Wall Street is turning to fresh quarterly reports from major U.S. banks later Wednesday, including Bank of America and Morgan Stanley. The results are expected to offer a sharper view of consumer health, credit quality and the impact of recent market swings on trading operations.
Consensus forecasts point to Bank of America posting earnings of $1.01 per share on revenue of $29.89 billion, while Morgan Stanley is projected to earn $3.00 per share on revenue of $19.72 billion.
Earlier this week, financial reports from large U.S. lenders signaled that consumer spending and borrowing remained resilient, hinting at underlying economic stability despite higher energy costs and geopolitical uncertainty. Analysts cautioned that it is still early in the earnings season to make broad judgments about the corporate outlook.
Trading divisions at major banks may be beneficiaries of recent volatility tied to advances in artificial intelligence and related technology stocks. JPMorgan reported a 20% jump in market revenue for the quarter ended March 31, mirroring robust growth at Goldman Sachs. Bank executives also described a steady environment for dealmaking and forecast a busy year for new listings, particularly in artificial intelligence and aerospace.
Nasdaq rally fuels concentration concerns
The recent surge in U.S. technology shares has sharpened the discussion over market breadth. The Nasdaq 100 has gained about 12% during its 10‑session winning streak, underscoring a strong rebound in large‑cap tech.
Traders are now watching whether the rally spreads to a wider group of stocks or remains confined to a handful of high‑performing technology names. Some analysts warn that the sharp run‑up could be vulnerable to a near‑term pullback, especially if earnings or guidance from leading tech firms disappoint.
A continued move higher in legacy technology stocks could also soak up speculative capital that might otherwise flow into alternative or cyclical sectors, reinforcing the current concentration in market leadership.
European luxury under pressure, chips buoyed by AI demand
In Europe, corporate earnings from luxury and technology firms shaped early trading.
French luxury house Hermes reported slower sales growth in the latest quarter, while Kering flagged softer demand following regional unrest. Shares of both groups fell sharply in morning trade, weighing on the broader European luxury segment.
By contrast, Dutch chip equipment maker ASML raised its full‑year sales outlook on strong orders from customers expanding artificial intelligence capacity. The stock gained just over 1%, lending support to European technology indices.
Chief executive Christophe Fouquet said the industry’s growth outlook is “solidifying,” and the company now expects 2026 net sales of between €36 billion and €40 billion, above its previous guidance. The upgrade reflects large-scale infrastructure spending plans by global tech firms to support AI applications, reinforcing the sector’s role as a key driver of capital expenditure.
Consumer strength and Fed expectations anchor rate outlook
In the background, robust U.S. consumer demand continues to anchor the economic narrative. Personal consumption expenditures reached $16.67 trillion in the last reported quarter of 2025, underscoring a durable spending backdrop.
That resilience, however, reduces pressure on the Federal Reserve to ease policy. Pricing in 30‑day Fed funds futures implies a 98.4% probability that the Fed will leave interest rates unchanged at its next meeting. The CME FedWatch Tool shows almost no expectation of an imminent rate cut, reflecting persistent economic strength.
Stable policy rates and a calmer dollar, combined with fading geopolitical risk premiums in energy, suggest that some of the volatility that has recently supported certain trading strategies could subside. A more orderly environment may demand adjustments from traders who have been positioned for sharp, conflict-driven price swings across assets.
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