Futures tied to major U.S. equity indices moved higher after U.S. President Donald Trump announced an extension of the Iran ceasefire just ahead of its expiration. However, continued disruption to shipping through the Strait of Hormuz is keeping oil prices elevated, while rising fuel costs are weighing on airline profitability, including at United Airlines (NASDAQ:UAL).
Futures edge higher
U.S. stock futures were in positive territory early Wednesday, as markets balanced the ceasefire extension against ongoing supply risks in global energy markets.
As of 03:36 ET, Dow futures were up 285 points, or 0.6%, S&P 500 futures gained 0.6%, and Nasdaq 100 futures climbed 0.8%.
The announcement from Trump came after Tuesday’s market close, when Wall Street indices had ended lower amid uncertainty surrounding renewed U.S.-Iran negotiations.
Despite geopolitical tensions, corporate earnings have remained a “bright spot” for equities, analysts at Vital Knowledge said, noting that most U.S. companies have “either beat-and-reiterate or beat-and-raise.” Retail sales data for March also exceeded expectations, although this was largely driven by an Iran-related energy shock that boosted gasoline purchases.
Investors continue to monitor earnings releases and macroeconomic data to assess how the conflict is affecting businesses and the broader economy. Some analysts suggest that, with equities trading near pre-conflict levels, markets may be signalling that the worst of the geopolitical turmoil has already passed.
Ceasefire extended
In a social media post following the close of U.S. trading on Tuesday, Trump confirmed that the ceasefire agreement with Iran had been prolonged just hours before its expected expiration.
He said the extension came at the request of Pakistan, which frequently mediates between Washington and Tehran, and added that the truce would remain in place “until such time as” Iranian officials present a “unified proposal” for peace.
However, the move was made unilaterally, leaving uncertainty over how both Iran and Israel will respond.
Plans for U.S. Vice President JD Vance to travel to Pakistan for further negotiations were also suspended after Iranian state media reported that their delegation viewed the talks as a “waste of time because the U.S. prevents reaching any suitable agreement.”
Oil remains volatile
At the same time, the U.S. naval blockade of Iranian ports and coastline continues, and tanker traffic through the Strait of Hormuz remains severely restricted.
Disruptions in this critical waterway—through which around 20% of global oil flows—have raised concerns about a surge in energy-driven inflation that could push central banks toward further rate hikes.
Brent crude prices rose slightly to around $98.95 per barrel, remaining well above pre-conflict levels. U.S. West Texas Intermediate crude also gained 0.4% to $89.99 per barrel.
“Sentiment benefits from another extension of a Trump-imposed deadline on Iran, but high oil prices suggest markets seek more concrete steps forward,” said Michiel Tukker.
Fed independence in focus
Kevin Warsh, Trump’s nominee for Federal Reserve chair, emphasised during his Senate confirmation hearing that monetary policy would remain “strictly independent” if he is appointed.
When questioned about whether Trump had tied the role to a commitment to cut interest rates, Warsh responded that the president “never asks” him to “predetermine” or “fix” any rate decisions.
Analysts at ING noted that markets had anticipated little volatility from the hearing, and that Warsh struck a balance—defending Fed independence while avoiding specific policy commitments—thereby limiting any impact on Treasury or rate expectations.
The hearing comes amid renewed scrutiny of the Federal Reserve’s autonomy. Trump recently said he would be “disappointed” if the next Fed chair does not lower rates, and has previously clashed with current chair Jerome Powell over monetary policy.
Powell, in a January statement, warned that a Justice Department investigation into a Fed renovation project and the “threat of criminal charges” were a “consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President.”
United Airlines under pressure
Shares of United Airlines (NASDAQ:UAL) edged higher in premarket trading, supported by easing geopolitical concerns, even as the company’s second-quarter and full-year profit outlook disappointed.
According to analysts cited by Reuters, the weaker guidance was largely due to higher fuel costs, while underlying performance remained broadly in line with expectations when excluding these pressures.
Rising jet fuel prices linked to the conflict are squeezing margins across the airline sector, despite resilient travel demand.
Peers are also feeling the strain: Delta Air Lines has scaled back growth plans, Alaska Air withdrew its full-year guidance, and low-cost carriers like Spirit Airlines are facing heightened pressure.
Earnings in focus
Markets are also looking ahead to a fresh batch of corporate results due later Wednesday, including updates from Boeing, Philip Morris International, and AT&T.
After the closing bell, attention will turn to results from Tesla, led by CEO Elon Musk, which are expected to be a key highlight for investors.