U.S. stock futures were little changed early Wednesday as investors weighed a tentative ceasefire between Israel and Iran, cautious signals from Federal Reserve Chair Jerome Powell, and a mixed outlook from FedEx.
Muted Market Movement
Stock futures hovered near flat ahead of the market open. By 03:40 ET, Dow futures edged up 33 points (0.1%), S&P 500 futures were flat, and Nasdaq 100 futures gained 19 points (0.1%).
Wall Street closed higher on Tuesday amid optimism that a ceasefire between Israel and Iran would hold. Traders were also digesting Powell’s comments, which reaffirmed the Fed’s cautious stance on rate changes.
Investors remain watchful of a looming July deadline for the expiration of a U.S. “reciprocal” tariff delay. The White House is racing to negotiate trade deals to avoid further disruption. Analysts at Vital Knowledge noted that while trade poses a significant risk, investor sentiment remains relatively calm, expecting the impact to remain within a 10% tariff range.
Israel-Iran Ceasefire Appears to Hold
A ceasefire between Israel and Iran brokered by former President Donald Trump continued into Wednesday, a day after both nations agreed to end 12 days of airstrikes.
Trump’s envoy to the Middle East, Steve Witkoff, described talks with Iran as “promising” and expressed confidence in pursuing a broader peace agreement. On Tuesday, Trump announced the ceasefire but criticized both sides for executing attacks that were likely pre-planned. Despite his earlier support for Israel and ordering strikes on Iranian nuclear sites, U.S. intelligence suggests those strikes only temporarily disrupted Iran’s underground nuclear program.
Oil Prices Edge Higher
Crude prices ticked up as the ceasefire reduced fears of supply disruptions in the oil-rich Middle East. However, prices remained near recent lows amid easing geopolitical tensions.
By early morning, Brent crude rose 1.7% to $67.30 per barrel, while West Texas Intermediate (WTI) gained 1.8% to $65.53. On Tuesday, both benchmarks hit multi-week lows following Israel’s earlier strikes on Iranian facilities.
Traders are also watching the Strait of Hormuz, a critical oil shipping route, amid uncertainty over Iran’s response to U.S. and Israeli actions.
Powell Faces Senate on Day Two
Federal Reserve Chair Jerome Powell returns to Capitol Hill for a second day of testimony, this time before the Senate. On Tuesday, Powell reiterated the Fed’s patient stance on interest rates, pointing to a “solid” economy and a 4.2% unemployment rate.
While inflation has cooled since peaking in 2022, Powell noted that it remains above the 2% target. Core personal consumption expenditures (PCE) inflation rose 2.6% year-over-year through May. Powell pushed back on political pressure, particularly from Trump, to slash rates quickly, cautioning that higher tariffs could re-ignite inflation.
FedEx Flags Economic Uncertainty
FedEx shares dropped in after-hours trading after the company issued a weaker-than-expected profit forecast for the current quarter. The shipping giant expects adjusted earnings of $3.40 to $4.00 per share, below the $4.06 consensus, according to LSEG data.
CEO Raj Subramaniam cited a “volatile” global demand environment. The company also blamed recent U.S. trade actions—especially the end of duty-free status for low-cost Chinese imports via platforms like Shein and Temu—for pressuring margins. FedEx withheld full-year guidance due to ongoing uncertainty.
As a key indicator of global commerce, FedEx’s results underscore the economic ripple effects of trade tensions and shifting consumer behavior.