U.S. stock index futures climbed sharply on Wednesday night after multiple reports indicated President Donald Trump and his Iranian counterpart had signed a preliminary memorandum aimed at ending their war. The late-session rebound followed a weak performance on Wall Street earlier in the day, when the Federal Reserve signaled a more hawkish posture amid concerns over sticky inflation.
By 20:07 ET (00:07 GMT), S&P 500 futures were up 0.8% at 7,556.75 points. Nasdaq 100 futures rose 1.4% to 30,400.50 points, and Dow Jones futures increased 0.6% to 52,247.0 points.
According to a set of media reports, the president signed a memorandum of understanding to end the Iran war while on a state visit to France on Wednesday evening. The president told reporters in Versailles that the deal had been signed. Reports from multiple outlets indicated that Iranian President Masoud Pezeshkian had also signed the document.
The reported terms of the preliminary agreement include an immediate cessation of hostilities - including in Lebanon - the reopening of the Strait of Hormuz and the lifting of a U.S. naval blockade against Iran. The memorandum is described as a preliminary accord that opens a 60-day window for further talks between Washington and Tehran. A principal focus of the follow-up discussions will be Iran’s nuclear program, with the United States seeking additional commitments that Iran will not develop a nuclear weapon.
The president also warned that the U.S. could resume attacks if Iran failed to comply with the terms of the agreement. Even so, the signing marked further progress toward an end to a conflict that, the reports note, has caused widespread economic disruption for nearly four months. Oil prices fell further on Wednesday evening amid the developments.
Earlier in the day, major U.S. stock indexes posted sharp declines after the Federal Reserve left its policy rate unchanged but delivered commentary that markets interpreted as a shift toward tighter policy. The meeting was the first under new Fed Chair Kevin Warsh. At least nine policymakers signaled they anticipate an interest rate increase by the end of 2026.
Chair Warsh flagged broad changes to how the Fed will communicate its plans and present interest-rate policy to the public, and he said the Fed "will deliver price stability," a line widely viewed as hawkish. The S&P 500 slid 1.2% on Wednesday, the Dow Jones Industrial Average fell 1.0% and the NASDAQ Composite declined 1.35%.
Markets reacted to the Fed’s guidance by increasing the probability of a policy tightening; CME FedWatch showed a rise in bets on at least a 25 basis-point rate hike by the end of 2026. Yields on U.S. Treasuries jumped after the meeting, adding pressure on equity markets.
The Fed’s shift toward a firmer stance reflected concerns about persistent inflation, part of which the article links to an energy-price surge associated with the Iran war. Additionally, recent signals of resilience in the labor market were cited as giving the central bank more latitude to consider higher rates.
In sum, markets moved in response to a mix of geopolitical relief and policy caution: late-session futures gains followed news of a preliminary ceasefire and associated trade and shipping concessions, while equities had earlier absorbed the consequences of a hawkish Fed and higher Treasury yields.
Investors are now parsing a short-term negotiation window between Washington and Tehran and weighing how any durable settlement - or its failure - could interact with inflation dynamics and monetary policy choices. For now, futures reflected optimism about an immediate decline in hostilities, even as central-bank messaging left investors mindful of potential interest-rate actions down the road.