U.S. stock futures showed little directional movement on Wednesday as market participants balanced cautious optimism over renewed diplomacy between Washington and Tehran against a heavy slate of corporate earnings. Traders have been watching developments in the Middle East closely, while also parsing results from major financial firms that have suggested persistent strength in consumer activity.
By 03:28 ET (07:28 GMT), contracts tied to the Dow, the S&P 500 and the Nasdaq 100 were essentially flat, reflecting a subdued start ahead of more scheduled reports from large banks and other companies.
A muted pre-open
Despite the volatility that followed the outbreak of the Iran conflict and the practical closure of the Strait of Hormuz - one of the world's most important shipping chokepoints - U.S. equity benchmarks have generally trended higher. The S&P 500 finished near an all-time high on Tuesday, while the Nasdaq Composite has risen roughly 14% over the past 10 sessions and recorded its longest winning streak since 2021.
Investors' confidence heading into the first wave of quarterly results has been lifted by commentary from Wall Street banks. Several lenders this week highlighted ongoing consumer spending and borrowing, a pattern that bolsters the view of a U.S. economy that has so far shown resilience in the face of potential energy-driven disruptions.
"It’s still way too early in the [calendar year first quarter] earnings season to draw any firm conclusions, but so far, we’ve been impressed by the resiliency of Corporate America," analysts at Vital Knowledge said in a note.
Diplomacy developments
U.S. President Donald Trump suggested that talks with Iran could resume within the next two days, following an initial round of negotiations held in Pakistan over the weekend. Vice President JD Vance, who led the U.S. delegation in Islamabad, also expressed an upbeat view on the negotiations' progress.
At the same time, American military authorities have said that seaborne trade to and from Iran is being fully halted under a U.S. blockade of Iranian ports. The restrictions were imposed earlier in the week after the Pakistan meetings did not produce an immediate, permanent ceasefire. Observers had cautioned that securing a comprehensive agreement in such a short time frame was unlikely.
The blockade has raised the prospect of further strain on oil flows through the Persian Gulf, which have already slowed considerably during the conflict. However, reporting indicates that more than 20 commercial vessels have recently transited the Strait of Hormuz, pointing to a possible easing in the movement of ships through that crucial waterway off Iran's southern coast.
Oil stays below $100
With expectations mounting for a longer-lasting de-escalation, crude prices remained under the $100-per-barrel mark. At 03:16 ET Brent crude futures, the global benchmark, were up 0.3% at $95.10 a barrel, while U.S. West Texas Intermediate futures fell 0.2% to $91.12 a barrel.
The moderation in oil has contributed to a softer U.S. dollar, which had previously served as a haven during the conflict. An index that measures the dollar against a basket of other currencies is now trading only modestly above levels seen before the fighting began in late February.
Still, oil contracts remain notably higher than pre-conflict prices, reflecting the impact of disruptions around the Strait of Hormuz - through which about a fifth of the world's oil normally flows. In addition, there is potential for the market to face further supply constraints: Reuters reported that a U.S. decision not to extend a 30-day waiver on Iranian oil at sea, which is due to expire this week, could remove another avenue of supply. A comparable waiver on Russian oil sanctions was also allowed to lapse after expiring last weekend.
Banking results in focus
Market attention is shifting to additional earnings from U.S. lenders, with Bank of America and Morgan Stanley scheduled to report later in the day. Big banks' trading and markets desks have benefited from recent market turbulence, since increased equity movements can prompt clients to reshuffle portfolios and seek hedges, boosting trading activity.
For example, Markets revenue at JPMorgan rose 20% in the three months ended March 31, mirroring gains seen at other major competitors. Beyond trading, banking executives have pointed to a robust environment for deals, with expectations that 2026 could see significant transactions - including possible initial public offerings from large technology and space companies.
Corporate Europe: luxury and semiconductors diverge
Across the Atlantic, corporate earnings have painted a mixed picture. Luxury goods maker Hermes reported a slowdown in quarterly sales growth, attributing the weakness in part to demand headwinds linked to the Middle East conflict. Gucci-owner Kering also posted lower sales, though it said demand trends had improved. Dior-owner LVMH released figures earlier in the week, and together these reports may indicate that the war is weighing on the outlook for the luxury sector.
Shares of both Hermes and Kering in France dropped sharply on Wednesday.
In contrast, chip equipment supplier ASML raised its annual sales guidance, citing strong demand from semiconductor manufacturers as firms race to expand artificial intelligence capabilities. ASML's stock ticked up by more than 1% on the news, underscoring continued investor appetite in parts of the technology supply chain tied to AI capacity expansion.
What traders are watching next
- Progress or setbacks in the U.S.-Iran negotiations and any subsequent changes to maritime operations around Iran.
- Quarterly results from Bank of America, Morgan Stanley and other major lenders, which will inform expectations for consumer resilience and trading revenues.
- Movements in crude benchmarks and the U.S. dollar as markets reassess the odds of prolonged supply disruptions.
The current market tone reflects a balance between diplomatic developments that could lessen energy risk and an earnings calendar that has so far highlighted unexpected toughness in spending and credit demand. Investors will likely continue to gauge the durability of those signals as more corporate reports arrive.