Futures tied to the major U.S. equity indices moved higher early Wednesday, while oil prices fell back below $100 a barrel. Gold edged upward and the U.S. dollar weakened slightly as investors reacted to renewed expectations of a possible resolution to the conflict involving Iran. Washington is reported to have proposed a 15-point plan aimed at ending hostilities, though Tehran is said to be setting demanding conditions for negotiations.
Futures move higher
U.S. equity futures advanced Wednesday, supported by growing optimism that Washington and Tehran could be approaching a diplomatic path to end a conflict that has lasted nearly a month and raised concerns about broader instability across the Middle East.
By 04:14 ET, futures for the Dow Jones Industrial Average were up 495 points, or 1.1%. S&P 500 futures gained 68 points, or 1.0%, while Nasdaq 100 futures rose 284 points, or 1.2%.
The previous trading session on Wall Street ended lower for the major indices as investors tried to assess the likelihood of a ceasefire between joint U.S.-Israeli forces and Iran. Military activity has continued, with the United States sending additional forces to the region while several allies in the Persian Gulf have reportedly encouraged Donald Trump to maintain the military campaign.
Tehran has rejected Trump’s description of recent negotiations as “very strong,” accusing the U.S. president of invoking the idea of talks in order to calm volatile financial markets.
Investors have also been weighing the potential economic impact of an extended conflict. Preliminary U.S. business activity figures for March underscored these concerns, with S&P Global reporting its flash purchasing managers’ index dropping to an eleven-month low, suggesting mounting pressure on economic growth due to higher prices tied to energy disruptions from the war.
The economic effects may not be limited to the United States. Separate PMI readings for the eurozone warned of “ringing stagflation alarm bells,” pointing to a combination of persistent inflation and weakening growth.
Oil drops below $100 on hopes for diplomatic progress
Despite ongoing tensions, early trading Wednesday reflected renewed optimism that the conflict could move toward negotiations.
Reports indicated that mediators from Turkey, Egypt and Pakistan are attempting to organize discussions between U.S. and Iranian representatives by Thursday.
With Trump reportedly searching for a diplomatic exit from the conflict, Washington is said to have presented Tehran with a 15-point peace framework. The proposal reportedly includes demands for Iran to dismantle its principal nuclear facilities and reopen the Strait of Hormuz, a critical shipping route south of Iran that has effectively been closed to tanker traffic for several weeks. The disruption has pushed energy prices higher and raised concerns about global inflation.
Iran is believed to have set strict preconditions for negotiations, including introducing fees for ships traveling through the strait. An Iranian military spokesperson also cast doubt on the possibility of a swift resolution, saying the U.S. is only “negotiating with” itself.
Even with mixed signals around the conflict, oil prices declined. By 04:31 ET, futures for Brent crude expiring in May had fallen 6.5% to $97.68 a barrel. While prices have slipped below the key $100 level, they remain well above roughly $70 per barrel recorded before the war began in late February.
Gold gains modestly
Gold prices moved higher during European trading hours, helped by softer oil prices and a slightly weaker U.S. dollar. However, the ongoing geopolitical tensions in the Middle East limited the upside.
Spot gold rose 2.0% to $4,564.34 per ounce by 05:03 ET, while U.S. gold futures jumped 3.7% to $4,597.42.
Lower energy costs can ease bond yields and pressure the dollar, conditions that often benefit non-yielding assets such as gold.
Speaking to reporters Tuesday, Trump said Washington was “in negotiations right now” with Iran and suggested Tehran was “talking sense” and appeared interested in reaching an agreement to end the conflict.
However, military activity has continued, with new attacks hitting facilities in U.S.-allied countries in the Persian Gulf. Trump’s apparent openness to negotiations has reportedly unsettled some Gulf states, prompting Saudi Arabia and the United Arab Emirates to encourage Washington to continue the campaign until Iran’s regional influence is reduced.
Currency markets steady
Meanwhile, the U.S. dollar index — which measures the greenback against a basket of major currencies — slipped 0.2% to 99.21.
Recent volatility in global currency markets also eased somewhat as Trump’s comments about possible talks with Iran helped lift equity markets across Europe and Asia and contributed to the drop in oil prices.
However, analysts at ING warned that markets are likely to remain highly sensitive to new developments related to Iran.
“It seems dangerous to position for an early resolution of the crisis, with the Iranians likely to want to take high energy prices as leverage in any negotiations,” the analysts wrote, adding that upcoming speeches from European central bankers are “very likely to sound hawkish.”
A market strategist cited by Reuters suggested that investors may also be experiencing an element of fatigue as they attempt to track rapid developments surrounding the conflict.
Chewy earnings in focus
Chewy Inc is scheduled to release its latest quarterly results, with investors watching closely for signs that the online pet retailer can stabilize sentiment after a prolonged decline in its share price.
The stock has fallen more than 29% over the past year.
Analysts at Morgan Stanley expect the company to report fourth-quarter revenue of around $3.27 billion, roughly in line with consensus forecasts, along with EBITDA of approximately $171 million — slightly above market expectations.
They view the results as a potential “set-up” for fiscal 2026, predicting initial guidance for revenue growth of about 7% to 7.5% and EBITDA margin expansion of 90 to 100 basis points.
Analysts at Wolfe Research also anticipate a modest earnings beat, forecasting revenue growth of around 0.8% year-on-year to $3.27 billion and EBITDA margins of about 4.9%, representing an improvement of 109 basis points.