Wall Street closes at a record for the first time since end of January
Investing.com - Futures linked to the main U.S. indices are muted, with traders eyeing the potential for more peace talks between the U.S. and Iran this week. Optimism around a possible de-escalation in the conflict keep oil prices below $100 a barrel, even as Washington carries out a blockade of Iranian ports. Meanwhile, more U.S. bank earnings are due out, after a string of big lenders suggested that the American economy has been resilient despite pressure from the war.
1. Futures muted
U.S. stock futures were subdued on Wednesday, as investors kept tabs on developments in Middle East peace negotiations and a raft of corporate earnings.
By 03:28 ET (07:28 GMT), the Dow futures contract, S&P 500 futures, and Nasdaq 100 futures were largely unchanged.
Despite recent volatility sparked by the Iran war and the effective closure of the Strait of Hormuz, one of the world’s critical shipping chokepoints, U.S. stocks have continued to march broadly higher. The benchmark S&P 500 closed near an all-time high on Tuesday, while the tech-heavy Nasdaq Composite has logged a 14% gain over the past 10 sessions and its longest winning streak since 2021.
Expectations are high around the nascent quarterly earnings season and have been further bolstered by Wall Street lenders, which noted this week that Americans are continuing to spend and borrow. The comments painted the picture of a U.S. economy resilient in the face of potential headwinds from an Iran-linked energy shock.
"It’s still way too early in the [calendar year first quarter] earnings season to draw any firm conclusions, but so far, we’ve been impressed by the resiliency of Corporate America," analysts at Vital Knowledge said in a note.
2. Trump signals more Iran talks ahead
U.S. President Donald Trump has suggested that peace talks between Washington and Tehran could restart in the next two days, following a first round of negotiations in Pakistan last weekend.
Vice President JD Vance, who led the U.S. delegation in Islamabad, also signaled optimism around the state of the negotiations.
Yet the U.S. has continued to blockade Iranian ports, with American military officials saying that seaborne trade in and out of the country has been completely halted. Trump imposed the restrictions earlier this week after the Pakistan talks failed to yield an immediate permanent ceasefire deal, although experts had played down hopes that an agreement could be secured in such a short period of time.
The blockade threatened to add to concerns over oil supply flows through the Persian Gulf, which have slowed to a trickle during the war. But the Wall Street Journal has reported that over 20 commercial vessels have managed to pass through the Strait of Hormuz recently, signaling a possible improvement in movement through the vital waterway off of Iran’s southern coast.
3. Oil prices remain below $100
With hopes growing for a prolonged detente, oil prices hovered below $100 a barrel.
At 03:16 ET, Brent crude futures, the global benchmark had moved up by 0.3% to $95.10 a barrel, while U.S. West Texas Intermediate crude futures had declined by 0.2% to $91.12 a barrel.
The decline has in turn fed into a softening in the U.S. dollar, which has largely served as an investment bastion during the war. An index tracking the greenback against a basket of currency peers is now trading only slightly above where it was before the start of the fighting in late February.
Still, the oil contracts remain well above pre-war levels, reflecting the impact of the shuttering of the Strait of Hormuz, through which roughly a fifth of the world’s oil flows.
According to Reuters, the market may also lose access to more supply following a U.S. decision not to extend a 30-day waiver of sanctions on Iranian oil at sea that is set to expire this week. A similar waiver on Russian oil sanctions was not renewed as well after expiring last weekend, the news agency reported.
4. More U.S. banks to report
Traders are now turning their attention to more earnings from U.S. lenders, with Bank of America and Morgan Stanley due to step into the spotlight later today.
Along with the energy shock stremming from the Iran war, investors have been grappling with ructions in stock markets caused by worries over disruptions from new artificial intelligence-powered tools. Trading desks at big banks tend to benefit from increased movements in equities, as this can force clients to reposition portfolios and make more trades to hedge risks.
Markets revenue at JPMorgan, the largest U.S. lender by assets, gained 20% in the three months ended on March 31, mirroring similar returns from rivals like Goldman Sachs.
Despite the volatile market backdrop, banking executives have also described a persistently strong environment for dealmaking. Optimism has grown that 2026 will be a year marked by massive transactions, particularly in the possible public listings of prominent AI and space firms.
5. European earnings
Corporate results in Europe have also been in focus.
Birkin bag maker Hermes posted a slowdown in quarterly sales growth amid demand headwinds from the Middle East conflict. Gucci-parent Kering also reported lower sales, even as it noted an improvement in demand trends. Coupled with figures from Dior-owner LVMH earlier this week, the reports may suggest that the war could be darkening the outlook for the luxury sector.
Shares of Hermes and Kering in France both fell sharply on Wednesday.
Wider sentiment in Europe was bolstered by chip equipment supplier ASML. The Dutch group, whose customers include semiconductor titans like TSMC and Intel, lifted its annual sales outlook, underlining the boost it has received from the artificial intelligence boom. Chipmakers have scrambled to get their hands on ASML’s products, as companies rush to build up their AI capabilities.
ASML’s shares ticked up by more than 1%.
