Overview
Futures tied to the principal U.S. indices moved higher on Wednesday as investors reacted to reports suggesting the U.S. could be seeking a route out of its military engagement with Iran. The prospect of de-escalation weighed on crude prices, which fell back below $100 a barrel, while other asset classes including gold and equities adjusted to the evolving news flow. Separately, Nike’s after-hours slide and reports of Microsoft’s talks over a large-scale power project in West Texas provided additional, more idiosyncratic drivers for markets.
1. Futures advance on hopes of winding down the Iran offensive
Into early Wednesday trading, U.S. stock futures pointed upward as traders appeared to take some comfort from accounts that the U.S. may be approaching an exit from its more-than-month-long operation against Iran. By 03:25 ET (07:25 GMT), the level moves included an increase of 270 points, or about 0.6%, in the Dow futures contract; a rise of 43 points, or roughly 0.7%, for S&P 500 futures; and a climb of 227 points, or about 1.0%, for Nasdaq 100 futures.
Stocks on Tuesday had already rallied after headlines indicated rising optimism that the U.S. might soon step back from its joint action with Israel against Tehran - a conflict that has broadened and raised concerns about contagion across the Middle East. The shift in sentiment followed a Wall Street Journal report suggesting President Donald Trump told aides he was open to leaving the conflict even if the Strait of Hormuz remained largely closed to tanker traffic. Analysts at Vital Knowledge said that later comments to reporters and posts on social media effectively confirmed the report.
President Trump also reiterated that talks with Iran are proceeding well - a characterization Tehran has frequently disputed - while Iran acknowledged message exchanges between the sides and said its president believed Tehran possessed the "necessary will" to end hostilities if it received assurances it would not face future attacks. ING strategists noted that risk sentiment had stabilized as equities recovered and bond spreads eased, and flagged the mixed messaging but growing signs that Washington might be looking for a way out.
2. Oil pulls back, but remains elevated versus pre-conflict levels
Oil markets reflected the relief evident among risk-sensitive traders. Brent crude futures for June delivery were last down 4.2% at $99.60 a barrel, a notable retreat from the near-term highs posted after the outbreak of the conflict in late February. Brent had spiked to almost $120 a barrel at that earlier peak, compared with roughly $70 a barrel before hostilities began.
The earlier surge in crude was driven in large part by the effective closure of the Strait of Hormuz - a critical sea lane running along Iran’s southern coast through which about one-fifth of the world’s oil moves. Fears of Iranian drone and missile attacks had all but halted tanker traffic through the waterway, intensifying concern about global oil supplies and the potential for further upward pressure on inflation. That prospect had, in turn, prompted expectations that central banks could consider additional interest-rate action, sending government bond yields higher and exerting downward pressure on equity valuations.
In comments to reporters in the Oval Office, President Trump said the U.S. would be "leaving very soon," adding that the White House’s objective of eliminating Iran’s nuclear threat had been "attained" and that Washington did not require a formal deal to conclude the conflict it began alongside Israel more than a month earlier. The president has not specified steps regarding the Strait of Hormuz; on Tuesday he suggested U.S. allies should assume responsibility for the strait.
3. Gold extends gains amid shifting dollar and rate expectations
Precious metals also reacted to the market re-pricing of geopolitical and policy risks. Spot gold moved back above $4,700 an ounce, marking a fourth consecutive session of gains in European trading. The metal jumped 3.5% on Tuesday as the U.S. dollar eased, even as gold registered a steep decline for March - down more than 11% - its weakest monthly showing since October 2008.
The prior weakness in gold was attributed in part to concerns that higher-for-longer interest rates would blunt demand for a non-yielding asset. Those concerns were somewhat tempered by Federal Reserve Chair Jerome Powell’s recent remarks that long-term U.S. inflation expectations remain anchored and that policy is "in a good place to wait and see."
ING analysts cautioned that gold still faces vulnerabilities, including the risk of a broad liquidity squeeze and a firmer U.S. dollar, but observed that recent pullbacks had tended to attract buying rather than signal a loss of confidence. Market participants are also awaiting U.S. economic data, notably the nonfarm payrolls report on Friday, for further cues on monetary policy direction and currency moves.
4. Nike posts modest beat but China weakness persists
Nike reported quarterly results that narrowly exceeded analyst expectations on both the top and bottom lines, but the footwear and apparel giant’s report highlighted continued softness in Greater China and a decline in gross margin. The company said it earned $0.35 per share on revenue of $11.28 billion for fiscal third quarter 2026, versus analyst forecasts of $0.30 per share on revenue of $11.23 billion.
Despite the beat, Nike’s shares slipped in aftermarket trading as the firm disclosed a 7% year-over-year decline in sales from Greater China to $1.62 billion - the seventh consecutive quarter of declines for a market that contributes around 15% of Nike’s global revenue. Investors have been waiting to see tangible results from CEO Elliott Hill’s turnaround initiatives, as the company faces margin pressure from tariffs and increasing competition from regional and specialty brands, including Anta, Li Ning, Swiss-based On, and Deckers’ Hoka.
5. Microsoft, Chevron and Engine No. 1 talks for major West Texas power plant
In the technology and energy intersection, Bloomberg reported that Microsoft is in exclusive discussions with Chevron and Engine No. 1 regarding a proposed natural gas-fired power complex in West Texas intended to supply electricity to a large data center campus. Sources cited by the report indicated the plant would cost about $7 billion and have initial generation capacity of approximately 2,500 megawatts.
The talks come as Microsoft and other hyperscalers rapidly expand computing infrastructure to meet growing artificial-intelligence workloads. Power sourcing is a critical component of that build-out. The report also noted that Microsoft is expected to spend up to $146 billion on AI-related capital expenditures in its 2026 fiscal year.
Conclusion
Wednesday’s trading reflected a market environment sensitive to geopolitical developments and corporate news alike. Hopes for a U.S. off-ramp from the Iran conflict supported risk assets and helped push oil lower from recent peaks, while safe-haven flows supported gold after a sharp March drawdown. Meanwhile, company-level headlines - from Nike’s earnings to Microsoft’s reported power-plant talks - provided additional cross-currents that market participants weighed alongside macro and policy signals. Participants will be watching upcoming U.S. economic data, particularly the nonfarm payrolls release, for further clarity on the trajectory of monetary policy and its implications for risk assets and commodity markets.