Nasdaq and Dow Jones set to bounce back after Trump extends ceasefire

US stocks have been called higher ahead of the open on Wednesday, after Washington extended the ceasefire with Iran, but tensions remained high in the Gulf.

Futures for the Dow Jones and S&P 500 were up 0.5%, while Nasdaq 100 futures were set to lead, climbing 0.7%.

Wall Street saw a weaker session yesterday, with the three main indices all closing down around 0.6%, with the Dow ending at 49,149, the S&P at 7,064 and the Nasdaq Composite at 24,259.

President Donald Trump said after the closing bell that the US had been asked by mediators in Pakistan to extend until Iran can come up with a “unified proposal” and “discussions are concluded, one way or the other”.

The President said this extension was because “the government of Iran is seriously fractured”.

He added in other posts that the US would continue its blockade of Iran, while Iran said it would keep the Strait of Hormuz locked up, too.

Oil prices remained elevated, with WTI crude at $90.5 a barrel after swinging between $88 and $92 over the past 24 hours.

In the past few hours, Iran’s Revolutionary Guard seized two vessels in the Strait, according to state-linked media, after accusing them of operating without authorisation and manipulating navigation systems. A third vessel was also reportedly attacked nearby.

Asian and European markets were mixed. Japan’s Nikkei and China’s Shanghai Composite rose around 0.4% to 0.5%, while London’s FTSE 100 was little changed and major indices in Germany, France and Spain slipped between 0.2% and 0.4%.

Tesla is the main earnings headline today, coming after the close, when there will also be a big focus on chips and semiconductors, with Lam Research, IBM and Texas Instruments also reporting after the bell.

Before the opening bell, there are earnings from GE Vernova, Philip Morris International, AT&T, Boeing, Vertiv, CME, Boston Scientific and Moody’s.

Market analyst Josh Mahony at Scope Markets said Trump’s “latest TACO move” has resulted in “a feeling that the chance of additional conflict could be easing”.

While the ceasefire has been extended, the real-world consequences of the Gulf war are being seen in more ways, said market analyst Joshua Mahony at Scope Markets.

UK inflation jumped to 3.3% and European airlines such as Lufthansa, SAS, KLM, and Iberia cancelled flights owing to the growing jet fuel shortages.

“Yesterday’s ceasefire extension brought a somewhat mixed response from markets, with Trump’s decision to extend in the absence of any tangible talks serving to highlight just how weak his position currently is.