U.S. stock futures were trading higher Wednesday morning as investors prepared for a key Federal Reserve interest rate decision while closely monitoring developments in the ongoing conflict involving Iran. Oil prices eased slightly but remained above $100 per barrel, sustaining concerns about renewed inflation that could delay expected Fed rate cuts later this year. In corporate news, chipmaker Micron is set to report earnings after the closing bell, while athleisure retailer Lululemon issued disappointing full-year guidance.
Futures edge higher
Futures tied to the major U.S. equity benchmarks moved into positive territory on Wednesday as traders awaited the Fed’s policy announcement and followed the latest developments in the Iran conflict.
At 04:18 ET, Dow futures were up 258 points, or 0.5%. S&P 500 futures rose 34 points, also 0.5%, while Nasdaq 100 futures gained 159 points, or 0.6%.
Wall Street’s main indices finished the previous session higher. Analysts at Vital Knowledge noted that reports of the deaths of two senior Iranian leaders, along with the resignation of a Trump administration official in protest of U.S. strikes on Iran, had raised hopes that a ceasefire could eventually be reached.
However, the Strait of Hormuz—an essential shipping lane through which about one-fifth of global oil supplies pass—remains effectively closed amid threats of Iranian attacks on vessels. Efforts by President Donald Trump to rally international support to reopen the waterway have largely been unsuccessful.
Uncertainty also persists over how long the U.S. military campaign will continue. Trump reiterated on Tuesday that the conflict could end soon, though similar statements made since the joint U.S.-Israeli offensive against Iran began in late February have not yet resulted in a ceasefire.
Oil prices ease but remain elevated
Pressure on Trump to find a path toward de-escalation appears to be growing, including criticism from within his own Republican Party. Nonetheless, the U.S. has shown little indication of scaling back its military operations against Iran.
On Tuesday, U.S. forces struck Iran’s coastline near the Strait of Hormuz using 5,000-pound bombs, targeting cruise missile facilities capable of attacking ships passing through the strait, according to U.S. Central Command.
Brent crude futures, the global benchmark, slipped 1.3% to $102.10 per barrel, while U.S. West Texas Intermediate crude futures dropped 2.3% to $93.25 per barrel. The decline followed the resumption of crude exports through a pipeline from Iraq’s Kirkuk oil fields to Turkey’s Ceyhan port, easing some supply concerns.
Despite the pullback, Brent remains well above pre-conflict levels, pushing U.S. gasoline prices to their highest point since October 2023. Rising fuel costs could become a key issue for voters ahead of November’s midterm elections and may also contribute to broader inflation pressures.
Fed decision ahead
Against the backdrop of rising geopolitical tensions and oil prices, the Federal Reserve is scheduled to announce its latest interest rate decision later on Wednesday.
Markets widely expect the central bank to keep borrowing costs unchanged at the conclusion of its two-day meeting, as policymakers assess inflation trends and recent economic data suggesting the U.S. labor market may be weakening.
Attention will likely focus on the post-meeting press conference from Fed Chair Jerome Powell, who is expected to step down from the role in May. Powell may provide early indications of how the Fed views the economic implications of the Iran conflict and the resulting surge in energy prices.
Before the outbreak of the war, investors had anticipated a possible rate cut later this year, potentially in the second half. However, the conflict in the Middle East could prompt the Fed to postpone any easing, analysts at ING noted.
Micron results in focus
Investors will also be watching for results from memory chipmaker Micron (NASDAQ:MU), which is scheduled to release its earnings after markets close on Wednesday.
The company previously issued a strong adjusted profit forecast for its second quarter in December, supported by higher memory chip prices amid ongoing supply shortages.
As major technology firms ramp up investments in artificial intelligence, demand has increased for advanced data centers and the high-performance memory chips used in them.
This trend could benefit Micron, whose products play a key role in data center servers. The company previously projected fiscal second-quarter adjusted earnings of $8.42 per share, plus or minus $0.20—nearly double analyst estimates cited by Reuters.
Chief Executive Sanjay Mehrotra told investors last year that supply constraints in the memory chip market are expected to persist beyond 2026, adding that Micron would only be able to meet between half and two-thirds of demand from some key customers.
Lululemon issues weak outlook
Shares of Lululemon Athletica (NASDAQ:LULU) declined in premarket trading Wednesday after the athleisure apparel company issued revenue and profit guidance for 2026 that fell short of analyst expectations.
The company also appointed a former executive from denim manufacturer Levi Strauss to its board, as speculation grows about a potential proxy battle.
While Lululemon said “almost all” of the costs tied to U.S. import tariffs would be offset through a strategy focused on maintaining more full-price sales, the retailer continues to face several challenges. These include a prolonged search for a new chief executive, slowing consumer spending, and rising competition in the athletic apparel market.
Lululemon forecast annual revenue of between $11.35 billion and $11.50 billion, compared with analyst expectations of $11.52 billion, according to LSEG data cited by Reuters. The company also projected annual earnings of $12.10 to $12.30 per share, below Wall Street forecasts.