U.S. Stock Futures Rise as Ceasefire Extension Lifts Sentiment, Oil Holds Near $100

BY COMFORT OGBONNA

U.S. stock futures moved higher on Wednesday while the dollar showed signs of weakness, as investor sentiment remained supported by President Donald Trump’s decision to extend the Iran ceasefire indefinitely. Despite the positive tone in equity markets, ongoing tensions in the Middle East and the continued closure of the Strait of Hormuz kept oil prices elevated near the $100 mark.

The ceasefire extension, announced just before its initial expiration, appears to have been made unilaterally by the United States. There has been no clear confirmation from Iran or U.S. ally Israel on whether they will adhere to the prolonged truce, leaving markets cautious even as they react positively in the short term.

In early trading, S&P 500 futures rose 0.4%, while Nasdaq futures gained 0.5%, reflecting optimism among investors. However, European futures dipped 0.3%, suggesting a more subdued start for markets across the region.

Across Asia, trading was mixed. MSCI’s broad index of Asia-Pacific shares outside Japan declined by 0.7%, pulling back after reaching a seven-week high in the previous session. Meanwhile, major indices in Japan, South Korea, and Taiwan surged to record levels, driven largely by renewed investor enthusiasm for artificial intelligence-related stocks.

Market analysts noted that the muted reaction to the ceasefire extension suggests it had already been largely priced in. The earlier truce had been widely viewed as open-ended, meaning the latest announcement did not significantly alter expectations.

Still, attention remains firmly focused on the Strait of Hormuz, a critical global energy chokepoint. Any indication that the waterway could reopen—or remain closed for an extended period—is expected to be a major trigger for market volatility in the days ahead.

Global markets have staged a strong recovery in April after suffering sharp losses in March due to escalating conflict in the Middle East. The rebound has been fueled by hopes of a lasting peace agreement and the perception that the worst of the geopolitical uncertainty may have passed.

This shift in sentiment has also impacted currency markets. The U.S. dollar, which had strengthened in March due to safe-haven demand, has since given up much of those gains. Investors appear more willing to take on risk, reducing demand for the currency as a defensive asset.

Trump also confirmed that the U.S. Navy would maintain its blockade of Iranian ports and coastal areas. Meanwhile, Iran has effectively shut down the Strait of Hormuz, through which roughly one-fifth of global energy supplies typically pass. The disruption has triggered a global energy shock, keeping oil prices elevated despite some recent pullback from peak levels.

Brent crude futures hovered around $98.47 per barrel, while U.S. West Texas Intermediate crude slipped slightly by 0.25% to $89.45 per barrel. Although prices have eased compared to March highs, they remain significantly above pre-conflict levels, raising concerns about inflationary pressures worldwide.

Higher energy costs could complicate central bank policies, potentially delaying interest rate cuts and keeping borrowing costs elevated for longer than expected. Analysts warn that continued uncertainty around the duration and scale of the crisis will likely keep markets volatile.

Investors are also closely watching developments in U.S. monetary policy. Federal Reserve chair nominee Kevin Warsh addressed senators during his confirmation process, emphasizing his commitment to independence from political influence. He stated that he had made no agreements with Trump regarding interest rate cuts and called for a revised approach to managing inflation, including changes to how the central bank communicates its policy outlook.

On the economic front, recent data showed that U.S. retail sales rose more than expected in March. The increase was partly driven by higher gasoline prices linked to the conflict, which boosted spending at service stations, while tax refunds supported consumer activity in other sectors.

Currency markets remained relatively quiet during Asian trading hours. The euro traded at $1.1742, while the Japanese yen stood at 159.31 per dollar. The British pound strengthened slightly to $1.3509. Meanwhile, the U.S. dollar index, which tracks the currency against a basket of six major peers, hovered at 98.35—near a one-week high. Despite this, the index has declined by about 1.5% so far in April after rising significantly in March.

Overall, while equity markets appear buoyant for now, underlying risks tied to geopolitical tensions and energy supply disruptions continue to cast a shadow over the global economic outlook. Investors are likely to remain cautious, closely monitoring any developments related to the ceasefire and the status of the Strait of Hormuz, both of which could significantly influence market direction in the near term.