US stock futures ticked higher on Wednesday, with ongoing Israel-Iran hostilities keeping investors on edge as they braced for the Federal Reserve’s interest-rate decision later in the day.
Dow Jones Industrial Average (YM=F) edged up roughly 0.2%, while those on the S&P 500 (ES=F) rose 0.3%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) moved up 0.3%, on the heels of a losing day for the major gauges.
Markets are on alert for any sign that the US has joined the Middle East conflict, which has swung stocks around since it broke out last week. President Trump said “our patience is wearing thin” and met with his national security team on Tuesday, raising speculation that the US could join Israel’s offensive. Iran has reportedly readied missiles for strikes on US bases in region if it does.
Against that background, attention is turning to the Fed’s policy decision due at 2 p.m. ET. As the central bank is expected to hold interest rates steady, the focus is on the “dot plot” to shed light on whether two rate cuts are still on the table this year. Investors will also listen closely to Chair Jerome Powell’s comments at his press conference for insight into pressures on the economy amid Trump’s tariffs and trade push.
Oil gains maintained with potential US involvement in Israel-Iran conflict in focus
Oil is holding gains after spiking to a five-month high on Tuesday. Concerns over the US joining the ongoing conflict between Israel and Iran continue to bolster the value of the commodity.
Bloomberg reports:
Brent (BZ=F) traded above $76 a barrel after closing 4.4% higher in the previous session, while West Texas Intermediate (CL=F) was near $75. President Donald Trump met with his national security team on Tuesday, after demanding Iran’s “UNCONDITIONAL SURRENDER” and warning of a possible strike against the country’s leader — Ayatollah Ali Khamenei — in a social media post.
Iran’s crude-exporting infrastructure has been spared so far, and most of the fallout has been confined to shipping. The Middle East produces around a third of the world’s oil and a wider conflict could drive prices even higher.
The biggest concern for the oil market centers on the Strait of Hormuz, although there are no signs that Iran is seeking to disrupt shipping through the narrow waterway. About a fifth of the world’s daily crude output passes through the strait at the entrance to the Persian Gulf.
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