U.S. stock futures are indicating a stronger open on Wednesday, with markets poised to recover after declines in the previous two sessions.
The early positive tone follows news that President Donald Trump has extended the U.S. ceasefire with Iran, prompting renewed buying interest.
Describing Iran’s leadership as “seriously fractured,” Trump said in a Truth Social post that the U.S. would refrain from further military action until Iranian leaders “come up with a unified proposal.”
At the same time, he confirmed that U.S. forces would maintain a blockade on maritime traffic to and from Iranian ports.
Iran dismissed Trump’s ceasefire extension as “meaningless” and said the Strait of Hormuz will remain closed until the U.S. blockade is lifted.
Mahdi Mohammadi, a senior adviser to Iran’s parliamentary speaker Mohammad Bagher Ghalibaf, described the move as a tactic “to buy time for a surprise strike,” adding that the “losing side cannot dictate terms.”
Soon after Trump’s announcement, Iran’s Revolutionary Guard Navy said it had seized two container ships in the Strait of Hormuz over alleged “maritime violations.”
The ongoing exchange between Washington and Tehran has added uncertainty, though investors continue to hold out hope for a diplomatic resolution.
Market participants are also encouraged by a solid start to the corporate earnings season.
“Investors appear to be focusing more on the direction of risk — whether things are improving or deteriorating — rather than the absolute level of geopolitical tension,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
“Earnings season is playing a key role in reinforcing this narrative,” she added. “Expectations for continued double-digit earnings growth remain intact, helping to justify elevated equity valuations even as macro risks persist.”
After a modest pullback on Monday, U.S. equities extended their losses on Tuesday. The major indices initially traded higher but reversed course and closed firmly in negative territory.
By the close, the Dow Jones Industrial Average had dropped 293.18 points, or 0.6%, to 49,149.38. The Nasdaq Composite declined 144.43 points, or 0.6%, to 24,529.96, while the S&P 500 fell 45.13 points, or 0.6%, to 7,064.01.
The sell-off was largely driven by a sharp rise in oil prices during the session.
U.S. crude futures extended Monday’s rebound, climbing more than 2.5% on the day.
The increase in oil prices helped offset last Friday’s steep decline, which had been driven by concerns ahead of the ceasefire deadline between the U.S. and Iran.
In an interview with CNBC, Trump said he expects to “end up with a great deal” with Tehran, while also indicating that military action could resume if the ceasefire lapses.
Separately, the New York Times reported, citing a U.S. official, that Vice President JD Vance’s planned trip to Pakistan had been cancelled after Iran failed to respond to U.S. proposals.
Earlier in the session, markets were supported by upbeat corporate earnings.
Shares of UnitedHealth (NYSE:UNH) surged 7% after the health insurer posted better-than-expected quarterly results and raised its full-year guidance.
Homebuilder D.R. Horton (NYSE:DHI) jumped 5.8% following stronger-than-forecast earnings for the first quarter.
In contrast, 3M (NYSE:MMM) fell 1.9% despite beating earnings expectations, as its full-year outlook disappointed investors.
Markets also found support from fresh economic data. A Commerce Department report showed U.S. retail sales rose more than expected in March.
Retail sales increased 1.7% for the month, following a revised 0.7% gain in February. Economists had anticipated a 1.4% rise.
Excluding autos, retail sales jumped 1.9%, above expectations of a 1.3% increase, after rising 0.7% in February.
Sector-wise, gold-related stocks declined sharply in line with falling bullion prices, with the NYSE Arca Gold Bugs Index dropping 6.4%.
Airline stocks also came under pressure, as shown by a 4.3% decline in the NYSE Arca Airline Index.
Pharmaceutical, commercial real estate, and utility sectors also weakened, while energy stocks advanced alongside rising oil prices.