U.S. stock futures were pointing to a higher open on Wednesday, indicating that equities may attempt to rebound after ending the previous session sharply lower despite recovering from their intraday lows.
Investors may be inclined to step back into the market following Tuesday’s early sell-off, which pushed the major indices to their lowest levels in roughly three months.
Early buying momentum may also be supported by a retreat in crude oil prices, which are easing after recently climbing to their highest levels since June.
The drop in oil prices followed an announcement by President Donald Trump that he had instructed the U.S. Development Finance Corporation to provide political risk insurance and guarantees aimed at protecting maritime trade routes in the Middle East.
Trump also said the U.S. Navy would escort tankers through the Strait of Hormuz if required, pledging to ensure the “free flow of energy to the world.”
The move helped ease concerns about potential disruptions to global energy supplies caused by the ongoing conflict that began after U.S. and Israeli strikes on Iran.
Futures remained higher even after payroll processor ADP released a report showing that U.S. private-sector employment grew more than expected in February.
During Tuesday’s trading session, stocks attempted to rebound after a steep early decline but ultimately closed significantly lower.
Although the major indices climbed well above their lowest levels of the day, they still ended the session deep in negative territory.
The Dow Jones Industrial Average fell 403.51 points, or 0.8%, closing at 48,502.27 after earlier dropping more than 1,200 points to its lowest intraday level in nearly three months.
The Nasdaq Composite declined 232.17 points, or 1.0%, to finish at 22,516.69, while the S&P 500 lost 64.99 points, or 0.9%, ending the day at 6,816.63. Earlier in the session, the indices had fallen by as much as 2.7% and 2.5%, respectively, reaching three-month lows.
The sharp early decline on Wall Street was largely driven by concerns surrounding the intensifying conflict in the Middle East.
As the conflict moved into its fourth day, President Donald Trump suggested the war could last four to five weeks but might “go far longer than that.”
Defense Secretary Pete Hegseth provided limited details about the duration of the operation against Iran but insisted it would not be “endless,” describing the campaign as a “generational” opportunity to reshape the Middle East.
Oil prices have surged in response to the conflict, raising concerns that higher energy costs could fuel inflation.
The prolonged rally in crude followed reports that Iran had closed the Strait of Hormuz in retaliation for U.S. and Israeli attacks and warned it could target vessels attempting to pass through the strategic waterway.
Supply concerns intensified further after attacks on several oil refineries, including Saudi Aramco’s facility in Ras Tanura.
“The longer oil and natural gas prices remain elevated, the greater the risk of a meaningful impact on inflation which could mean higher interest rates, an event that’s typically negative for equity markets,” said Dan Coatsworth, head of markets at AJ Bell.
Despite the broader market’s recovery attempt, gold-related stocks continued to weaken amid a sharp decline in gold prices.
The NYSE Arca Gold Bugs Index dropped 8.0%, extending its pullback from the record closing high reached last Friday.
Semiconductor shares also remained under heavy pressure, highlighted by a 4.6% decline in the Philadelphia Semiconductor Index.
Steelmakers, computer hardware companies, networking firms and oil services stocks also posted notable losses, while software stocks managed to move against the broader downward trend.
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