Category: Market Summary

U.S. stock futures suggest a muted open on Wednesday, with markets lacking clear direction after the previous session’s decline.

Investors are staying cautious ahead of the upcoming policy announcement from the Federal Reserve later in the day.

Data from CME Group’s FedWatch Tool shows markets are fully pricing in a pause in interest rates for a third consecutive meeting.

With that outcome largely expected, attention is likely to turn to the Fed’s statement for signals about the future path of monetary policy. However, in the absence of firm guidance, focus may shift toward earnings from major technology companies.

Alphabet Inc. (NASDAQ:GOOGL), Amazon.com Inc. (NASDAQ:AMZN), Meta Platforms Inc. (NASDAQ:META), and Microsoft Corporation (NASDAQ:MSFT) are all due to report after the closing bell.

As part of the so-called “Magnificent Seven,” their results are expected to play a key role in shaping sentiment, particularly as questions re-emerge around the sustainability of AI-related spending.

At the same time, markets have shown resilience in the face of another surge in oil prices, with U.S. crude futures briefly climbing above $100 per barrel following renewed tensions involving Iran and comments from President Donald Trump.

“Iran can’t get their act together. They don’t know how to sign a nonnuclear deal. They better get smart soon!” Trump said on Truth Social, alongside an image of himself holding a rifle and the words “No more Mr. Nice Guy!”

Market Recap

After a mixed session on Monday, U.S. equities moved lower on Tuesday, with all three major indices finishing in negative territory and technology stocks leading the decline.

The Nasdaq Composite dropped 223.30 points, or 0.9%, to 24,663.80. The S&P 500 fell 35.11 points, or 0.5%, to 7,138.90, while the Dow Jones Industrial Average edged down 25.86 points, or 0.1%, to 49,141.93.

The Nasdaq pulled back from its recent record close as artificial intelligence-related stocks came under pressure following a report from The Wall Street Journal that OpenAI had missed internal targets for both user growth and revenue.

Sources cited in the report suggested that the shortfall has raised concerns about the company’s ability to sustain its heavy investment in data center infrastructure.

Oracle Corporation (NYSE:ORCL), which is closely tied to OpenAI through a major infrastructure partnership, fell 4.1%.

Semiconductor stocks also declined, including Broadcom Inc. (NASDAQ:AVGO), Advanced Micro Devices Inc. (NASDAQ:AMD), and NVIDIA Corporation (NASDAQ:NVDA).

Oil Prices and Geopolitical Tensions

Higher oil prices added another layer of uncertainty, with U.S. crude briefly trading above $100 per barrel before easing.

The rally has been fueled by ongoing geopolitical tensions between the U.S. and Iran.

Recent developments suggest that Trump is unlikely to accept Iran’s proposal to reopen the Strait of Hormuz while postponing negotiations over its nuclear programme.

In another Truth Social post, Trump said Iran is in a “state of collapse” and is seeking to reopen the Strait of Hormuz as it deals with internal leadership challenges.

CNN reported that Iran is preparing a “revised proposal,” with mediators in Pakistan waiting for the updated plan.

Sector Performance

Gold-related stocks declined sharply as bullion prices dropped, dragging the NYSE Arca Gold Bugs Index down 4.6%.

Semiconductor stocks also came under heavy pressure, with the Philadelphia Semiconductor Index falling 3.6%.

Weakness was also seen in computer hardware, networking, and airline stocks, while energy shares, particularly oil and gas companies, moved higher.

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.

U.S. equity futures traded without a clear direction on Tuesday, as investors weighed reports that President Donald Trump is dissatisfied with Iran’s latest proposal to end the ongoing two-month conflict. At the same time, corporate updates and central bank signals kept sentiment cautious. OpenAI is said to have fallen short of internal revenue goals, while BP (NYSE:BP) shares advanced on the back of stronger oil and gas prices. Meanwhile, the Bank of Japan left rates unchanged but signaled it remains prepared to tighten policy if inflation pressures persist.

Futures drift as oil strengthens and earnings season ramps up

At 03:28 ET, Dow futures were broadly flat, S&P 500 futures were down 14 points, or 0.2%, and Nasdaq 100 futures had declined by 117 points, or 0.4%.

In the prior session, the S&P 500 and Nasdaq Composite both finished higher, while the Dow Jones Industrial Average ended in negative territory.

Market participants are also bracing for one of the busiest stretches of the reporting season, with about 35% of S&P 500 companies set to release results in the coming days. On Monday, Verizon (NYSE:VZ) upgraded its full-year earnings outlook, while Domino’s Pizza (NASDAQ:DPZ) warned of weaker demand, sending its shares down 8.8%. Earnings from Visa (NYSE:V), Coca-Cola (NYSE:KO) and T-Mobile US (NASDAQ:TMUS) are due later today.

Big Tech names later this week are expected to provide key updates on spending tied to artificial intelligence infrastructure—an area that has helped underpin equity markets despite geopolitical risks and energy-related concerns.

Trump weighs Iran proposal as diplomatic progress stalls

Reports indicate that Trump is unhappy with Iran’s latest offer, which would end hostilities and reopen the Strait of Hormuz but defer discussions over Tehran’s nuclear ambitions.

Trump has repeatedly stated that dismantling Iran’s nuclear capabilities—particularly any route to a nuclear weapon—has been a central aim of the joint U.S.-Israeli offensive launched in late February. Reuters, citing a U.S. official, said this stance has contributed to his dissatisfaction with the proposal.

Hopes for renewed talks were also dampened after Trump canceled plans to send negotiators to Pakistan for a fresh round of discussions. Iran’s foreign minister visited Islamabad twice over the weekend before meeting Russian President Vladimir Putin on Monday and securing his backing.

Despite these diplomatic efforts, the Strait of Hormuz remains largely closed to shipping traffic. The key chokepoint, which handles roughly one-fifth of global oil flows, has been heavily restricted for weeks, helping push crude prices well above pre-conflict levels.

Concerns are mounting that higher energy costs could trigger a renewed surge in global inflation, potentially forcing central banks to respond with higher interest rates. Brent crude futures continued to climb on Tuesday.

OpenAI falls short of internal targets

OpenAI has reportedly missed internal benchmarks for both user growth and revenue, according to The Wall Street Journal, raising fresh concerns over its ability to sustain heavy spending.

The company is said to have failed to reach its target of one billion weekly active users for ChatGPT by the end of 2025 and also missed several monthly revenue goals earlier this year.

Chief Financial Officer Sarah Friar reportedly warned executives that slower revenue growth could jeopardize the company’s ability to fund future data center commitments. Board members have also questioned recent infrastructure deals and CEO Sam Altman’s push to secure additional computing capacity.

These concerns come as OpenAI moves closer to a potential IPO later this year, prompting a renewed focus on cost discipline and operational efficiency.

BP shares rise on strong earnings performance

BP (NYSE:BP) shares moved higher in London trading, supported by elevated oil and gas prices that boosted profitability.

The company reported underlying replacement cost profit of $3.2 billion, more than doubling from $1.38 billion a year earlier, reflecting the benefits of tighter global supply conditions.

Bank of Japan holds rates but signals tightening bias

The Bank of Japan left its policy rate unchanged at 0.75%, in line with expectations, but warned that rising inflation and softer growth tied to Middle East tensions could shape future decisions.

The vote was not unanimous, with three members of the nine-person board backing a rate increase—the highest level of dissent since 2016.

The central bank stated that “[g]iven that underlying inflation has been approaching 2% and real interest rates are at significantly low levels,” it will “continue to raise its policy rate in response to developments in the economy, prices and financial conditions.”

Analysts at Capital Economics said: “While the Bank of Japan left interest rates unchanged today, its Outlook report was hawkish and we’re sticking to our forecast that the Bank will hike rates in June.”

U.S. equity futures suggest a subdued opening on Monday, with markets expected to tread water after the strong rebound seen at the end of last week.

Investor sentiment remains cautious, as uncertainty lingers in the Middle East following the breakdown of U.S.-Iran negotiations over the weekend.

With talks between Washington and Tehran entering a more uncertain phase, reports indicate that Iran has proposed reopening the Strait of Hormuz and ending the conflict, while postponing discussions over its nuclear programme.

Attention is likely to shift toward corporate earnings in the days ahead, with five members of the “Magnificent Seven” set to release quarterly results this week.

Markets are also closely watching the Federal Reserve’s policy decision due on Wednesday. While rates are widely expected to remain unchanged, the Fed’s accompanying statement may offer insight into the future direction of monetary policy.

After a weaker showing on Thursday, stocks rebounded on Friday, with the Nasdaq and S&P 500 both recovering losses and finishing at record closing highs.

The Nasdaq led the gains, rising 398.09 points, or 1.6%, to 24,836.60, while the S&P 500 added 56.68 points, or 0.8%, to 7,165.08.

The Dow Jones Industrial Average, however, moved lower, slipping 79.61 points, or 0.2%, to 49,230.71, dragged down by declines in Merck & Co. (NYSE:MRK) and Verizon Communications Inc. (NYSE:VZ).

On a weekly basis, the Nasdaq gained 1.5% and the S&P 500 rose 0.6%, while the Dow posted a 0.4% loss.

The broader market recovery was helped by a sharp rally in Intel Corporation (INTEL:INTC), which surged more than 23% to a record closing high.

Intel’s jump came after the chipmaker reported first-quarter earnings that exceeded expectations and issued second-quarter revenue guidance above analyst forecasts.

Procter & Gamble (NYSE:PG) also advanced notably after delivering stronger-than-expected fiscal third-quarter results.

Investor sentiment was further supported by a pullback in oil prices, which had surged in recent sessions.

U.S. crude futures dropped more than 1% following a Reuters report that Iranian Foreign Minister Abbas Araqchi was set to travel to Pakistan for talks with the United States.

Araqchi stated on X that the visit would focus on bilateral issues and regional developments, without providing additional details.

According to CNN, U.S. envoy Steve Witkoff and Jared Kushner are expected to represent the United States, with Vice President JD Vance stepping in if needed.

Meanwhile, Donald Trump’s decision to extend the ceasefire between Israel and Lebanon by three weeks also contributed to easing pressure on oil prices.

Semiconductor stocks rallied alongside Intel, with the Philadelphia Semiconductor Index climbing 4.3% to a record close.

Gold-related shares also moved higher as bullion prices increased, pushing the NYSE Arca Gold Bugs Index up 2.3%.

Software stocks rebounded after Thursday’s decline, with the Dow Jones U.S. Software Index rising 2.1%.

Oil services and computer hardware sectors also posted gains, while telecom, pharmaceutical and banking stocks came under pressure.