The major U.S. index futures are currently pointing to a modestly higher open on Wednesday, with stocks likely to move back to the upside after coming under pressure over the course of the previous session.

The upward momentum on Wall Street comes despite ongoing concerns about the ongoing conflict between Israel and Iran.

Iran’s supreme leader Ayatollah Ali Khamenei threatened the U.S. with “irreparable damage” if the country engages in the clash after President Donald Trump demanded Iran’s “unconditional surrender” in a post on Truth Social on Tuesday.

However, trading may be somewhat subdued ahead of the Federal Reserve’s announcement of its latest monetary policy decision this afternoon.

While the Fed is widely expected to leave interest rates unchanged, the accompanying statement and Fed officials’ latest projections may provide clues about the outlook for rates.

Stocks moved notably lower during trading on Tuesday, giving back ground following the rebound seen in the previous session.

The Nasdaq slid 180.12 points or 0.9 percent to 19,521.09, the S&P 500 decreased 50.39 points or 0.8 percent to 5,982.72 and the Dow fell 299.29 points or 0.7 percent to 42,215.80.

The early pullback on Wall Street came as traders looked to cash in on yesterday’s strong gains amid renewed concerns about the ongoing clash between Israel and Iran.

While reports hinting at an end to hostilities contributed to a rally on Monday, news that President Donald Trump left a G7 summit early to focus on the conflict has led to worries about further escalation.

In a post on Truth Social, Trump said French President Emmanuel Macron mistakenly said he left the summit in order to work on a cease fire between Israel and Iran.

“He has no idea why I am now on my way to Washington, but it certainly has nothing to do with a Cease Fire,” Trump said. “Much bigger than that.”

Trump stepped up his attacks in a subsequent post calling for Iran’s “unconditional surrender,” leading to further downside for stocks.

The weakness on Wall Street also came following the release of a Commerce Department report showing U.S. retail sales fell by more than expected in the month of May.

The Commerce Department said retail sales slid by 0.9 percent in May after edging down by a revised 0.1 percent in April.

Economists had expected retail sales to decline by 0.6 percent compared to the 0.1 percent uptick originally reported for the previous month.

Excluding a steep drop in sales by motor vehicle and parts dealers, retail sales fell by 0.3 percent in May after coming in unchanged in April. Ex-auto sales were expected to inch up by 0.1 percent.

Airline stocks showed a significant move back to the downside after rebounding on Monday, dragging the NYSE Arca Airline Index down by 3.8 percent.

Considerable weakness was also visible among housing stocks, as reflected by the 2.5 percent slump by the Philadelphia Housing Sector Index.

Pharmaceutical, telecom and healthcare stocks also saw notable weakness, while energy stocks regained ground along with the price of crude oil.

Commodity, Currency Markets

Crude oil futures are climbing $0.51 to $75.35 a barrel after surging $3.07 to $74.84 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,406, down $0.90 compared to the previous session’s close of $3,406.90. On Tuesday, gold fell $10.40.

On the currency front, the U.S. dollar is trading at 144.92 yen compared to the 145.29 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1503 compared to yesterday’s $1.1480.

Asia

Asian stocks ended mixed on Wednesday as Middle East unrest deepened and focus shifted to the Federal Reserve’s interest rate decision later in the day.

Risk sentiment worsened after reports claimed that the U.S. may consider joining Israel in striking Iranian nuclear sites.

Adding to the speculation, U.S. President Donald Trump demanded “unconditional surrender” from Tehran, warning that U.S. patience was “wearing thin” and that America held “complete and total control over Iranian skies.”

The Federal Reserve is widely expected to leave rates unchanged later today, but investors will scrutinize updated economic projections for clues to future moves.

The dollar wavered against major currencies in Asian trading, while oil prices eased after rallying 4 percent in the previous session. Gold was marginally lower in limited sideways range trading.

China’s Shanghai Composite Index finished marginally higher at 3,388.81 as speeches by top financial regulators at the opening of the annual Lujiazui Forum delivered few fresh policy signals.

Hong Kong led regional losses, with the benchmark Hang Seng Index tumbling 1.1 percent to 23,710.69 amid growing fears of a U.S.-Iran conflict.

Japanese markets rose sharply to hit a four-month high as a weaker yen boosted export-related stocks.

The yen hovered close to 145.4 per dollar, stabilizing after three consecutive losing sessions as data showed Japan’s exports fell in May for the first time in eight months, highlighting the impact of U.S. tariffs.

April’s core machinery orders dropped and manufacturing sentiment worsened in June, pointing to subdued domestic spending.

The Nikkei 225 Index jumped 0.9 percent to 38,885.15, while the broader Topix Index settled 0.8 percent higher at 2,808.35.

Seoul stocks rose notably to end higher for a third day running, led by big gains in market heavyweight Samsung Electronics and IT shares after the government unveiled plans to make a massive investment in artificial intelligence (AI).

The Kospi rose 0.7 percent to 2,972.19. Naver soared nearly 18 percent as the presidential office appointed Ha Jung-woo, a tech expert from the company, as its first senior presidential secretary for AI affairs.

Australian markets ended slightly lower amid rising geopolitical tension and ahead of key domestic jobs data.

The benchmark S&P/ASX 200 Index dipped 0.1 percent to 8,531.20, with miners leading declines as iron ore prices continued to retreat. The broader All Ordinaries Index ended down 0.2 percent at 8,757.90.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended little changed with a negative bias as 12,627.32.

Europe

European stocks are turning in a mixed performance on Wednesday, with Middle East tensions, regional inflation data and central bank decisions in focus.

Amid escalating tensions between Iran and Israel, the Strait of Hormuz, a critical global oil route, has become a focal point of concern. Investors remain worried that disruption of oil flows through this narrow strait could hit global economy hard.

In economic news, U.K. consumer price inflation softened in May largely due to easing transportation cost, data from the Office for National Statistics revealed.

The consumer price index registered an annual increase of 3.4 percent, slightly slower than the 3.5 percent rise seen in April. However, inflation was slightly above forecast of 3.3 percent.

The annual inflation rate in Austria edged down to 3.0 percent in May 2025 from 3.1 percent in the previous month, matching preliminary estimates.

Elsewhere, Sweden’s central bank has cut its key policy rate to 2 percent and said there was a small chance of further easing later this year if economic weakness persists.

Later in the day, the Federal Reserve is widely expected to leave rates unchanged, but investors will scrutinize updated economic projections for clues to future moves.

While the U.K.’s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index is down by 0.1 percent and the German DAX Index is down by 0.3 percent.

BP Plc and Shell were moving higher as oil prices held near five-month highs amid fears the U.S. may join Israel’s offensive against Iran.

Plane maker Airbus rallied over 3 percent after an announcement that it would increase shareholder returns in the coming years.

U.S. Economic News

First-time claims for U.S. unemployment benefits edged modestly lower in the week ended June 14th, according to a report released by the Labor Department on Wednesday.

The report said initial jobless claims dipped to 245,000, a decrease of 5,000 from the previous week’s revised level of 250,000.

Economists had expected jobless claims to slip to 245,000 from the 248,000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 245,500, an increase of 4,750 from the previous week’s revised average of 240,750.

With the uptick, the four-week moving average reached its highest level since hitting 246,000 in the week ended August 19, 2023.

The Commerce Department also released a report on Wednesday showing a steep drop by new residential construction in the U.S. in the month of May.

The report said housing starts plunged by 9.8 percent to an annual rate of 1.256 million in May after jumping by 2.7 percent to a revised rate of 1.392 million in April.

Economists had expected housing starts to edge down to an annual rate of 1.360 million from the 1.361 million originally reported for the previous month.

The report also said building permits slumped by 2.0 percent to an annual rate of 1.393 million in May after tumbling by 4.0 percent to a revised rate of 1.422 million in April.

Building permits, an indicator of future housing demand, were expected to rise to an annual rate of 1.430 million from the 1.412 million originally reported for the previous month.

At 10:30 am ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended June 13th. Crude oil inventories are expected to decrease by 2.3 million barrels after falling by 3.6 million barrels in the previous week.

The Treasury Department is scheduled to announce the details of this month’s auctions of two-year, five-year and seven-year notes at 11 am ET.

At 2 pm ET, the Federal Reserve is due to announce its latest monetary policy decision, followed by Fed Chair Jerome Powell’s post-meeting press conference at 2:30 pm ET.




U.S. Stocks May Move Modestly Higher In Early Trading

2025-06-18 13:00:12

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