U.S. equity futures traded higher on Thursday, pointing to a recovery on Wall Street after stocks retreated sharply in the previous session following the Federal Reserve’s latest policy announcement.
Investor sentiment improved after the United States and Iran signed a preliminary agreement aimed at ending months of conflict, easing concerns over energy supplies and the potential impact on global economic growth.
Peace Framework Signals Progress in Middle East
President Donald Trump and Iranian President Masoud Pezeshkian formally approved a memorandum of understanding that lays the groundwork for negotiations on a permanent peace settlement.
The agreement takes effect immediately and includes provisions for the reopening of the Strait of Hormuz and the lifting of U.S. naval restrictions on Iranian ports.
Under the 14-point framework, officials from both countries are expected to begin detailed negotiations over the next 60 days.
Crude Prices Continue to Retreat
Oil markets reacted positively to the prospect of improved supply flows, with crude prices extending recent losses.
Futures moved closer to levels seen before the outbreak of hostilities in late February, helping ease fears of energy-driven inflation.
“That has huge significance for inflation and interest rates, as well as business, consumer and investor sentiment,” said Russ Mould, investment director at AJ Bell. “It takes the pressure off industries and households and is hugely positive for global economic growth.”
Intel Jumps After Trump Comments
Among notable movers, Intel (NASDAQ:INTC) surged 8.5% in premarket trading.
The gain followed comments from Trump indicating that Apple (NASDAQ:AAPL) had agreed to work with Intel on chip design and manufacturing projects in the United States.
The development fueled optimism across the semiconductor sector and helped support broader market sentiment.
Federal Reserve Sparks Market Volatility
Markets struggled on Wednesday after the Federal Reserve kept interest rates unchanged but adopted a more cautious stance on inflation.
The Dow Jones Industrial Average fell 507.12 points, or 1%, to 51,492.55. The S&P 500 declined 91.25 points, or 1.2%, to 7,420.10, while the Nasdaq dropped 354.69 points, or 1.3%, to 26,021.66.
Policymakers Leave Door Open to Further Tightening
The Fed maintained its benchmark rate at 3.5% to 3.75%, a move widely anticipated by markets.
However, updated forecasts suggested policymakers now see a greater possibility that rates could move higher before the end of the year.
The median projection points to rates reaching 3.8% by the end of 2026, a notable shift from earlier expectations for lower borrowing costs.
Strong Retail Data Highlights Consumer Resilience
Economic data released before the Fed decision painted a relatively positive picture of consumer spending.
The Commerce Department reported that retail sales rose 0.9% in May, following an upwardly revised 0.4% increase in April.
The reading comfortably exceeded forecasts for a 0.5% gain.
Software and Transport Sectors Lead Declines
Technology shares were among the weakest performers during Wednesday’s session.
The Dow Jones U.S. Software Index fell 3.2%, while transportation stocks also came under heavy selling pressure, pushing the Dow Jones Transportation Average down 3%.
Retailers, oil service companies, gold producers and commercial real estate stocks also lost ground, although semiconductor and brokerage shares showed relative strength.
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