US stock index futures turn positive

US stock index futures turn positive

US stock index futures turned positive on Wednesday, driven by a shift in geopolitical expectations following indirect diplomatic outreach between Iran and the United States. Dow Jones Industrial Average futures rose 0.2% to 48,598, S&P 500 futures gained 0.18% to 6,837, and Nasdaq 100 futures advanced 0.28% to 24,824, signaling a potential rebound after a volatile week marked by Middle East tensions. The surge followed reports that Iran's intelligence ministry had engaged the CIA through a third-party intermediary to discuss de-escalation, reducing fears of a prolonged conflict and easing pressure on energy markets.

Oil prices, which had surged earlier in the week amid concerns over potential disruptions at the Strait of Hormuz, trimmed gains as the diplomatic signal lowered the risk of a full-scale blockade. This alleviated inflationary pressures and encouraged investors to re-enter equities after a sharp sell-off the previous day. However, markets remain sensitive to evolving developments, with analysts highlighting ongoing risks from Middle East tensions, oil volatility, and upcoming economic data such as the ADP payroll report and nonfarm payrolls.

The rebound underscores the market's responsiveness to geopolitical developments, where even tentative diplomatic efforts can reverse risk-off sentiment. While the immediate focus remains on the Middle East, investors are also monitoring Federal Reserve policy expectations and inflation trends, which could influence the sustainability of the rally. Gold prices, which had risen sharply earlier in the week amid safe-haven demand, also stabilized, reflecting mixed signals about market uncertainty.

For now, the futures rebound suggests a temporary reprieve from war-driven volatility, but structural risks remain critical for near-term market direction.