US stock futures rebounded on Wednesday following a sharp selloff triggered by heightened geopolitical risks related to Iran and a more hawkish Federal Reserve outlook. S&P 500 futures rose 0.51% overnight, aiming to recover most of the previous session's 0.63% decline, which marked the index's worst day since March 27 and its first back-to-back drop in three weeks [1]. Dow Jones futures gained 0.59% to above 49,600, while Nasdaq 100 futures advanced 0.81% to near 26,850 during European trading hours [2].
The rebound in futures was attributed to US President Donald Trump's extension of the ceasefire after the collapse of the second round of US-Iran talks, which improved market sentiment [1][2]. Additionally, a Bloomberg headline citing Tasnim News Agency suggested Iran had received indications that the US may be willing to ease its naval blockade [2]. Despite strong US economic data and upbeat earnings, equities had broadly declined the previous day, with two-thirds of S&P 500 constituents closing lower. Energy was the only major sector to advance, up 1.31% on higher oil prices [1].
In regular trading on Tuesday, the Dow Jones and Nasdaq 100 both fell 0.59%, while the S&P 500 dropped 0.63% [2]. UnitedHealth Group shares surged more than 8% after beating first-quarter expectations and raising its earnings outlook [2], while FXStreet reported a 6.96% gain for UnitedHealth Group [1]. Amazon also advanced by over 1% after announcing plans to invest up to $25 billion in AI startup Anthropic [2].
US Retail Sales rose 1.7% month-over-month in March, surpassing expectations of 1.4% and following a revised 0.7% increase in February. On an annual basis, sales increased 4.0% in March, matching the previous reading [2]. The stronger-than-expected retail sales data reinforced expectations that the Federal Reserve will keep interest rates unchanged this year. Fed nominee Kevin Warsh pledged independence from the White House and advocated broad reforms, a stance described as more hawkish than markets had anticipated [2].
Market sentiment improved overnight as the ceasefire extension and positive earnings helped offset concerns about Iran and the Fed's outlook. However, the previous session's declines highlighted ongoing investor caution amid geopolitical and monetary policy uncertainties [1][2].
CONCLUSION
US stock futures rebounded after a sharp Iran-driven selloff, buoyed by a ceasefire extension and strong corporate earnings. While positive economic data and sector gains supported sentiment, ongoing geopolitical and Fed policy concerns continue to weigh on markets. Investors remain attentive to further developments in US-Iran relations and Federal Reserve signals.