U.S. equity futures were slightly higher on Wednesday but remained close to flat, as investors braced for a wave of major announcements that could influence market direction. The Federal Reserve is widely expected to leave interest rates unchanged, though reports suggest it may adopt a more hawkish tone in its policy statement. At the same time, several mega-cap technology firms are set to report earnings, with particular focus on their spending around artificial intelligence. In Europe, a heavy slate of corporate results is also underway, while Donald Trump has reportedly instructed aides to prepare for a prolonged blockade of Iranian ports.
Futures Tick Slightly Higher
U.S. stock futures moved modestly higher early in the session, ahead of what is shaping up to be one of the busiest trading days of the year.
As of 03:26 ET, Dow futures were up 47 points, or 0.1%, S&P 500 futures gained 5 points, or 0.1%, and Nasdaq 100 futures rose 85 points, or 0.3%.
Wall Street’s main indices declined in the previous session, largely due to concerns about the financial health of OpenAI after a report from The Wall Street Journal indicated the company had missed certain revenue and user targets. Stocks linked to OpenAI, either through partnerships or investments, also came under pressure.
Meanwhile, ongoing tensions between the U.S. and Iran continued to weigh on sentiment, with stalled negotiations delaying any reopening of the Strait of Hormuz, which has effectively been shut to shipping for weeks. Oil prices have risen as a result, raising concerns about inflation and global growth.
Despite these headwinds, corporate earnings have shown resilience. According to Reuters, just over one-third of S&P 500 sectors have reported results so far, with 81% of companies exceeding expectations.
Fed Decision in Focus
The Federal Reserve is expected to keep its benchmark interest rate unchanged within a range of 3.5% to 3.75% at the conclusion of its two-day meeting, as policymakers assess the inflationary impact of geopolitical tensions.
Reports from the The Wall Street Journal suggest the Fed could adjust its forward guidance in a more hawkish direction by removing references to potential rate cuts in 2026.
The meeting may also mark one of the final press conferences by Fed Chair Jerome Powell, whose term is set to expire in May.
“Powell’s (supposedly) final press conference shouldn’t rock the boat, but he could err a bit on the hawkish side given the lack of progress in the Gulf,” analysts at ING Group said in a note.
Former Fed Governor Kevin Warsh has been nominated by Trump as Powell’s successor, with the Senate Banking Committee expected to vote on his confirmation this week.
Tech Earnings Take Center Stage
Investors are also closely watching a wave of earnings reports, particularly from major technology firms whose heavy investment in AI has fueled recent market gains.
Alphabet Inc. (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) are all scheduled to release results after the close.
Following the negative sentiment sparked by the OpenAI report, these earnings will serve as a key test for confidence in the AI-driven market rally.
“[P]articipants will be looking not only for the classic ‘beat and raise’ from these ‘Magnificent Seven’ names, but also for clarity as to the scale of capital expenditure over coming quarters, the source of that expenditure, and the timeframe over which a return on said investment is likely to be achieved,” said Michael Brown.
“With the sector coming into earnings, essentially, at record highs, we are to a degree ‘priced for perfection’, leaving little room for disappointment, and with the market hence likely to punish any sub-par reports.”
Beyond tech, companies including AbbVie (NYSE:ABBV), Regeneron Pharmaceuticals (NASDAQ:REGN), and Phillips 66 (NYSE:PSX) are also due to report.
European Earnings Flood Markets
Amid the ongoing geopolitical uncertainty, several major European companies released results earlier in the day.
Adidas AG saw its shares jump more than 7% after reporting stronger-than-expected first-quarter operating profit, despite a “very volatile and heavily discounted” retail environment.
UBS Group AG rose after posting an 80% increase in quarterly profit, supported by strong trading and client activity linked to market volatility.
STMicroelectronics advanced to its highest level since 2024 following better-than-expected results.
Airbus SE edged higher after reaffirming its annual delivery targets, even as it faces supply challenges from Pratt & Whitney.
Mercedes-Benz Group AG posted modest gains despite weaker revenue, while Banco Santander hovered near flat after reporting a 12.5% rise in underlying profit.
Trump Prepares for Extended Iran Blockade
Donald Trump has instructed his team to prepare for a prolonged blockade of Iran, according to a report by the The Wall Street Journal.
Citing U.S. officials, the report said the strategy would focus on intensifying pressure on Iran’s oil exports and restricting shipping access, with a blockade seen as a lower-risk option compared to renewed large-scale military action or rapid diplomatic efforts.
This approach follows a ceasefire in April that halted a major bombing campaign but left regional tensions unresolved.
According to the report, Trump recently rejected a three-step proposal from Iran that would have allowed an early reopening of the Strait of Hormuz while postponing nuclear negotiations, considering it insufficient to meet U.S. demands.
The report added that Trump remains firm on requiring Iran to suspend uranium enrichment for at least 20 years and accept additional long-term restrictions.