Key Takeaways

• Futures climb: Dow futures rose 0.5%, S&P 500 futures added 0.6%, and Nasdaq 100 futures gained 0.9%.
• Bond sell-off pauses: Treasury yields slipped marginally after the 30-year hit levels unseen since the global financial crisis.
• BCA Research’s view: “Long-term inflation expectations remain anchored, but the near-term inflation path is still uncertain.”
• Iran peace hopes: Trump told lawmakers the war could end “very quickly”; Vance said Tehran wants a deal.
• Supertankers exit Hormuz: Two Chinese-flagged carriers and a South Korean VLCC departed the strait, signaling possible easing of flows.
• Oil prices fall: Crude retreated on hopes that Hormuz supply disruptions could be more fully unlocked.
• Nvidia the main event: The AI chip giant reports after the closing bell in the most anticipated earnings of the week.
• AI competition risk: Rival processors from Google and Amazon, plus memory chip cost pressures, are key concerns.
• Nvidia premarket up 1.7%: Chip stocks broadly steady ahead of results.
• Analog Devices slips: The group announced a $1.5 billion cash acquisition of Empower Semiconductor for AI power management.
• Target doubles forecast: The big-box retailer raised its annual sales growth outlook, lifting shares.
• Lowe’s warns: The home improvement seller cautioned on the state of the U.S. housing market.

U.S. stock index futures pointed higher on Wednesday, as investors geared up for crucial earnings from artificial intelligence semiconductor giant Nvidia and kept tabs on elevated government bond yields.

At 08:33 ET (12:33 GMT), Dow futures were up 0.5%, S&P 500 futures added 0.6%, and Nasdaq 100 futures climbed 0.9%.

The main averages on Wall Street retreated on Tuesday. Equities came under pressure from an extended sell-off in government bonds, reflecting worries that the ongoing Iran war could spark a burst of inflation around the world and — in turn — central bank interest rate hikes.

Notably, the yield on the 30-year U.S. Treasury bond — widely viewed as a gauge of how traders see the economic outlook — soared to levels not hit since the global financial crisis almost two decades ago. Yields tend to move in the opposite direction to prices.

But the downturn in government debt markets appeared to pause, with U.S. Treasury yields having last slipped marginally.

“Long-term inflation expectations remain anchored, but the near-term inflation path is still uncertain. Markets are still trying to gauge how large the next inflation wave will be,” analysts at BCA Research said in a research note.

Iran Peace Hopes Build

Still, hopes remained that the U.S. and Iran may be able to forge a deal to end their more than two-month war.

U.S. President Donald Trump told lawmakers on Tuesday evening that the Iran war could end “very quickly.” He said earlier this week that he had postponed planned fresh attacks on Iran at the request of three Gulf countries.

Vice President JD Vance also struck an optimistic tone in separate comments, stating that Tehran wanted to make a deal.

Meanwhile, two Chinese-flagged supertankers carrying oil exited the Strait of Hormuz on Wednesday, Reuters reported, citing LSEG and Kpler shipping data. A South Korean-flagged Very Large Crude Carrier, Universal Winner, is also leaving the narrow waterway off Iran’s southern coast — which has been effectively closed to tanker traffic since the start of the U.S.-Israeli war on Iran in late February.

Oil prices fell, echoing optimism that the crimped supply flows through the strait may be more fully unlocked.

Nvidia Earnings Take Center Stage

Beyond the Middle East, perhaps the major event of the trading week is set to take place after the closing bell, when semiconductor giant Nvidia unveils its latest quarterly results.

Nvidia — whose technology is central to the development of cutting-edge AI models — has become a bellwether for the broader AI industry. Many big-name tech companies have outlined plans to spend heavily on building the infrastructure needed to power AI systems, meaning expectations for Nvidia’s returns are, as usual, sky-high.

Yet some worries are swirling around the threat of competition posed by rival processors from Alphabet’s Google and Amazon, as well as the sustainability of the AI spending rush and soaring costs for memory chips.

Shares of Nvidia were 1.7% higher in premarket trading ahead of the results, while other chip stocks were broadly steady.

Analog Devices slipped after the group said it would acquire Empower Semiconductor for about $1.5 billion in cash, in a bid to grow its AI-focused power management operations.

Retailers in the Spotlight

Elsewhere, a slew of retailers this week were in focus as traders hunted for insight into how American shoppers are reacting to headwinds from the Iran war. Target shares were higher after the big-box chain doubled its annual sales growth forecast, although Lowe’s dipped following a warning on the state of the U.S. housing market from the home improvement goods seller.