U.S. equity futures were modestly higher on Wednesday but hovered near unchanged levels as investors braced for a series of key developments. The Federal Reserve is expected to leave interest rates unchanged, though reports indicate it could shift its messaging in a more hawkish direction. Meanwhile, several mega-cap technology firms are due to report results, with markets closely watching their spending on artificial intelligence. In Europe, a wave of corporate earnings is underway, while Donald Trump has reportedly told aides to prepare for an extended blockade of Iranian ports.
Futures Edge Higher
U.S. stock futures posted slight gains in early trading, ahead of what is shaping up to be one of the busiest sessions of the year.
As of 03:26 ET, Dow futures were up 47 points, or 0.1%, S&P 500 futures added 5 points, or 0.1%, and Nasdaq 100 futures climbed 85 points, or 0.3%.
Wall Street’s main indices ended the previous session lower, largely due to renewed concerns about the financial outlook for OpenAI after a The Wall Street Journal report said the firm had missed certain revenue and user targets. Shares of companies linked to OpenAI also weakened following the news.
At the same time, stalled negotiations between the U.S. and Iran continued to weigh on sentiment, delaying any reopening of the Strait of Hormuz, which has effectively remained closed to shipping traffic for weeks. Oil prices have moved higher, adding to concerns over inflation and economic growth worldwide.
Even so, corporate earnings have shown resilience. Reuters data shows that just over one-third of S&P 500 sectors have reported so far, with 81% of companies beating expectations.
Focus Turns to Fed Decision
The Federal Reserve is widely expected to keep rates steady within a 3.5% to 3.75% range at the end of its two-day meeting, as policymakers monitor the inflationary implications of geopolitical tensions.
According to the The Wall Street Journal, the Fed may adjust its forward guidance in a more hawkish tone by removing references to potential rate cuts in 2026.
The meeting could also include 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 wrote.
Former Fed Governor Kevin Warsh has been nominated by Trump as Powell’s successor, with a Senate vote on his confirmation expected this week.
Tech Earnings in the Spotlight
Investors are also digesting a busy schedule of corporate results, particularly from major technology companies whose AI investments have underpinned recent market gains.
Alphabet Inc. (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) are all due to report after the market close.
Following the negative sentiment triggered by the OpenAI report, these results will be closely watched as a test of confidence in the AI-driven 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.”
Outside of tech, companies including AbbVie (NYSE:ABBV), Regeneron Pharmaceuticals (NASDAQ:REGN), and Phillips 66 (NYSE:PSX) are also set to release results.
European Earnings Wave
Amid the uncertain backdrop, several major European firms released their latest quarterly figures earlier in the day.
Adidas AG saw its shares jump more than 7% after posting stronger-than-expected operating profit for the first quarter, despite what it described as a “very volatile and heavily discounted” retail environment.
UBS Group AG moved higher after reporting an 80% increase in quarterly profit, supported by strong trading and client activity amid market volatility.
STMicroelectronics advanced to its highest level since 2024 following better-than-expected results.
Airbus SE edged up 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 Signals Extended Iran Blockade
Donald Trump has instructed aides to prepare for a prolonged blockade of Iran, according to a report from the The Wall Street Journal.
Citing U.S. officials, the report said the strategy would focus on tightening restrictions on Iran’s oil exports and limiting maritime access to its ports, with a blockade viewed as a lower-risk alternative to renewed large-scale military action or a rapid diplomatic resolution.
The move follows an April ceasefire that halted a major bombing campaign but left tensions unresolved.
According to the report, Trump recently rejected a three-step proposal from Iran that would have reopened the Strait of Hormuz quickly while postponing nuclear negotiations, judging it insufficient to meet U.S. demands.
The report added that Trump remains firm in requiring Iran to suspend uranium enrichment for at least 20 years and accept additional long-term restrictions.
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