Dow Jones Industrial Average futures rose in Wednesday’s US session, recovering from an overnight low below 49,100 to near 49,500. Earlier selling cut the contract by about 750 points from Tuesday’s high above 49,800.
The rebound followed an extension of the Iran ceasefire by President Trump after a request from Pakistan’s Field Marshal Asim Munir and Prime Minister Shehbaz Sharif. The White House kept the Iranian blockade in place.
In the Strait of Hormuz, Iran’s navy seized two container ships on Wednesday. Brent crude rose more than 2% to about $101 a barrel, and WTI climbed 2% to near $92.
Corporate results supported share prices during the Q1 reporting period. Boeing shares gained 5% after posting a smaller-than-expected Q1 loss, while GE Vernova jumped 12% after Q1 revenue beat forecasts.
FactSet data shows over 80% of S&P 500 companies reporting so far have topped expectations. The Nasdaq set a new intraday high and closed up 1.3%, while the S&P 500 ended 0.8% higher.
Markets next watch Thursday’s 12:30 GMT jobless claims, seen at 212K versus 207K, and 13:45 GMT S&P Global PMIs, with Manufacturing at 52.5 versus 52.3 and Services at 50.0 versus 49.8. Friday’s University of Michigan releases include 1-year inflation expectations at 4.8%.
We saw a similar pattern back in 2025 during the Hormuz incident, where sharp, fear-driven selloffs were quickly erased. That event taught us that geopolitical dips are often buying opportunities, especially when earnings are strong. Traders should view any immediate market weakness not as a reason to panic, but as a potential entry point.
Current volatility provides opportunities for options traders. The CBOE Volatility Index (VIX) recently spiked above 18, a significant jump from the lows we saw earlier this year, reflecting heightened uncertainty in the Middle East. This elevated premium means selling puts on strong companies or broad market indexes could be a viable strategy to collect income while setting a lower purchase price.
Unlike the oil shock we witnessed in 2025, Brent crude has so far failed to hold above $90 per barrel despite the latest tensions. U.S. Energy Information Administration data shows crude inventories have been building, suggesting the market is better supplied than it was a year ago. This keeps a lid on energy-driven inflation and supports transport and industrial stocks.
The foundation for this market remains the impressive earnings season, which echoes the strength we saw in 2025. With over 77% of S&P 500 companies beating profit estimates so far this quarter, according to FactSet, there is a strong fundamental case for buying into weakness. The continued demand for artificial intelligence infrastructure is providing surprise tailwinds, just as it did for names like GE Vernova last year.
The main risk remains stubborn inflation, which continues to complicate the Federal Reserve’s plans. Recent Consumer Price Index data showed inflation running hotter than expected at an annualized 3.5%, forcing markets to price out anticipated rate cuts for the summer. Derivative strategies should therefore include hedges against the possibility that interest rates will remain higher for longer than anticipated.
