By CHAN HO-HIM and MATT OTT AP Business Writers
Wall Street pointed toward modest gains in premarket trading Wednesday and oil traded below $80 a barrel on optimism that Iran will quickly open the Strait of Hormuz if a tentative deal with the U.S. to end the war is signed Friday.
Futures for the S&P 500 and Dow Jones Industrial Average were unchanged before the opening bell. Nasdaq futures rose 0.4%.
Details of the interim U.S.-Iran deal, which is due to be formally signed in a ceremony in Switzerland on Friday, were leaked on Tuesday.
According to the document, the U.S. would secure at least $300 billion to rebuild Iran after the war and work to end all American and United Nations sanctions imposed on Tehran if a final agreement addressing Iran’s nuclear program is reached.
The U.S. agreement to immediately allow Iran to sell its oil freely and the offer to eventually lift all sanctions represent major concessions that outstrip the terms of Iran’s 2015 nuclear deal with world powers. U.S. President Donald Trump unilaterally withdrew America from that accord in his first term, declaring it the “worst deal ever.”
Oil prices steadied as Brent crude, the international standard, edged less than 1% higher to $79.43 per barrel after falling more than 5% on Tuesday. It remains above its roughly $70 a barrel level in late February, before the war started.
Benchmark U.S. crude inched up 60 cents to $76.65 a barrel.
“Normalizing (oil) flows will take time,” economists at HSBC wrote in a note this week. “Hurdles include mine clearance, insurance reinstatement, emptying excess Gulf oil storage, repositioning ships, and restarting idled production fields.”
Later in the day the Federal Reserve will wrap up a two-day policy meeting, the first under its new chair Kevin Warsh. It is widely expected to keep its benchmark interest rate unchanged despite pressure from Trump to cut rates.
Worries over higher prices due to the Iran war may lead the Fed to stand pat, since lower rates could fuel higher inflation.
“With weak wage growth and rent growth, underlying forces are pointing to inflation falling sharply once the energy price shock recedes. We don’t expect the Fed to hike rates in 2026,” Preston Caldwell, chief U.S. economist at Morningstar wrote in a commentary. “We expect the Fed to resume cutting in 2027.”
In equities trading, chip companies saw their shares return to gains after widespread losses a day earlier.
Micron rose 3.5% overnight after losing more than 6% on Tuesday, while Intel jumped 3.1%, taking back some of its 8.5% drop the day before.
La-Z-Boy soared more than 16% after the cushioned furniture maker blew past Wall Street’s profit targets.
In early European trading, Britain’s FTSE 100 was unchanged following official data that showed U.K. inflation was steady in May at 2.8% even as fuel prices increased. Germany’s DAX was also flat, while France’s CAC 40 rose 0.2%.
Asian stocks were mostly higher with markets in Japan and South Korea setting new records. Tokyo’s Nikkei 225 gained 0.7% to 69,902.25, after reaching an intraday high of 70,125.75 following news that Japan’s exports jumped 17% in May from a year earlier, helped in part by strong demand for high-tech products.
South Korea’s Kospi gained 1.6% to 8,864.24, also closing at another all-time high, with big technology stocks climbing despite a sell-off of artificial intelligence-related shares on Wall Street. Samsung Electronics, the country’s most valuable company, was up 1%. Chipmaker SK Hynix jumped 5.8%.
Hong Kong’s Hang Seng lost 0.7% to 24,312.16, while the Shanghai Composite index rose 0.4% to 4,108.08.
Australia’s S&P/ASX 200 climbed 0.5% to 8,966.30.
Taiwan’s Taiex added 0.2% and India’s Sensex rose 0.3%.