U.S. stock index futures were largely unchanged on Friday as traders digested fresh reports that Washington and Tehran had reached an agreement to prolong a ceasefire and remove restrictions on shipping through the Strait of Hormuz. Sources cited in reporting said the deal was not yet signed off by President Donald Trump, leaving markets poised for further developments.
The calm in futures followed a session in which major U.S. benchmarks finished at record levels. "Markets are heading into the weekend in a good position as risk appetite has improved as geopolitical fears ease and inflation data avoids a major upside surprise," said Daniela Hathorn, senior market analyst at Capital.com. She cautioned, however, that the rally rests on optimistic positioning, elevated valuations and the assumption that tensions will remain subdued while corporate earnings remain resilient. Given those conditions, Hathorn said investors are likely to be highly sensitive to geopolitical developments and incoming inflation figures in the near term.
At 04:46 a.m. ET, futures showed modest movement: Dow E-minis were up 37 points, or 0.07%; S&P 500 E-minis were up 2.5 points, or 0.03%; and Nasdaq 100 E-minis were down 6 points, or 0.02%.
Despite lingering concerns about how the Iran conflict could affect inflation and global growth, Wall Street’s major indexes have extended a run of record closes, a trend market participants attribute to renewed enthusiasm around artificial intelligence and expectations for robust earnings growth.
Corporate news produced some of the day’s most pronounced moves. Dell surged 38.5% in premarket trading after the company raised its full-year profit and revenue forecasts. Other hardware and enterprise technology names climbed as well, with Hewlett Packard Enterprise and Super Micro Computer gaining 17.2% and 11%, respectively.
The S&P 500 was positioned to record its ninth straight weekly advance, its longest winning streak since December 2023. The Dow Jones Industrial Average and the Nasdaq Composite were also set to finish the week with gains.
On the macroeconomic front, data released on Thursday showed U.S. inflation rose at the fastest pace in three years in April. Separately, first-quarter U.S. gross domestic product was revised down to a 1.6% annualized increase. Those figures fed into futures pricing of monetary policy: money markets were pricing in the Federal Reserve keeping interest rates unchanged for the remainder of the year, while leaving some possibility of a 25 basis point increase in December.
Federal Reserve officials in recent days have said there could be a case for raising interest rates if inflation does not moderate, and they have expressed skepticism that AI will meaningfully help to reduce inflation pressures. Market participants said they would be monitoring remarks from Fed presidents Anna Paulson, Neel Kashkari and Mary Daly through the trading day for further signals on the monetary policy path.
In other stock-specific action, apparel retailer Gap saw its shares plunge 15% after it cut its full-year sales forecast, a move the company said reflected strains among budget-conscious consumers. Meanwhile, Okta climbed 8.1% after reporting first-quarter revenue that exceeded analysts’ expectations.
Overall, investors entered the weekend with cautious optimism - supported by easing geopolitical concerns and a lack of major upside surprises in inflation data - but remained alert to the sensitivity of markets to geopolitical headlines, inflation readings and upcoming central bank commentary.