U.S. equity futures traded higher on Thursday as markets reacted to signs that negotiators are pushing toward an extension of the temporary ceasefire between the U.S. and Iran, and as initial corporate commentary during the earnings season skewed positive.
By 03:38 ET (07:38 GMT), the Dow futures contract had risen by 56 points, or 0.1%. S&P 500 futures were up 15 points, or 0.2%, while Nasdaq 100 futures climbed 114 points, or 0.4%. Outside the United States, Japan’s Nikkei index reached a fresh all-time high and European equities moved slightly higher.
Major U.S. indexes logged gains in the previous session, with both the benchmark S&P 500 and the tech-heavy Nasdaq Composite touching record levels. Market participants have cited improving prospects for a diplomatic resolution to the Iran conflict as a key driver of sentiment.
Bank executives weighing in during early reporting suggested the U.S. economy has so far held up in the face of an energy supply shock tied to the effective partial closure of the Strait of Hormuz, a strategic maritime chokepoint through which roughly a fifth of global oil shipments pass. Analysts at Vital Knowledge noted in a research note: "[W]hile it’s still early in the [calendar first-quarter] reporting season, and the full fallout from the Iran war hasn’t been felt yet in the economy, we’ve been positively surprised by corporate results thus far, especially the ‘status quo’ messaging from bank CEOs."
More corporate reports are scheduled for release later in the day as the U.S. earnings calendar ramps up. Beverage maker PepsiCo is expected to report before the opening bell and streaming company Netflix is set to announce results after the market close.
Diplomatic momentum and market expectations
Market analysts said extending the current detente between Washington and Tehran has become the prevailing investor expectation, to the extent that additional headlines about progress may have diminishing power to further lift equity prices. Although a formal, long-term ceasefire has not been signed, news coverage has portrayed the mediation efforts as advancing.
Mediators remain engaged in attempts to negotiate a permanent halt to hostilities between the U.S. and Iran, with the temporary two-week ceasefire due to expire later this month. Media reports have indicated both sides agreed in principle to resume talks after the initial negotiations held last weekend in Pakistan did not immediately produce a resolution. Those reports, citing officials familiar with the matter, said a date and venue for further discussions have not yet been set. The Wall Street Journal reported Vice President JD Vance would lead the U.S. delegation if future meetings take place.
In related diplomacy, U.S. President Donald Trump said discussions between Israel and Lebanon were scheduled for later in the day, and the Financial Times, citing Lebanese officials, reported a ceasefire between those two countries is expected "soon." Such developments are being watched closely by markets given their potential to influence the stability of any broader U.S.-Iran arrangement.
Energy markets: oil below $100 but sensitive to Strait of Hormuz developments
Despite the cautious diplomatic optimism, tensions persist around naval operations and restrictions on maritime traffic. A U.S. naval blockade of certain Iranian ports remains in effect. A senior Iranian military commander warned Washington against continuing the blockade, while U.S. Central Command has stated that no Iranian-linked commercial ships or oil tankers have successfully evaded the interdiction.
Some reports suggested that a number of ships and oil tankers have navigated the Strait of Hormuz this week. Reuters also reported that Iran may consider permitting vessels to transit the Omani side of the strait without risk of attack as part of a potential peace arrangement.
On balance, oil prices moved slightly higher but stayed below the $100-a-barrel mark, a level that highlights the market’s sensitivity to any extended disruption of flows through the Strait of Hormuz. For the week, crude posted notable declines, with much of the upside capped by improving prospects for a diplomatic resolution between the U.S. and Iran.
China’s first-quarter growth beats expectations
China’s economy expanded more than anticipated in the first quarter of 2026, reporting year-on-year GDP growth of 5%, a figure that sits at the upper range of Beijing’s annual target. The stronger-than-expected print was supported by robust export demand and a pickup in domestic consumption following several years of underperformance.
While the headline growth number helped lift some optimism about future oil demand from the world’s largest crude importer, other domestic indicators suggested that momentum cooled toward the end of the quarter. Observers also flagged that the conflict in the Middle East adds uncertainty to China’s outlook, given that a significant portion of its crude imports originate from Iran.
TSMC posts record quarterly profit, flags potential supply risks
Taiwan Semiconductor Manufacturing, the world’s largest contract chipmaker, reported stronger-than-expected results for the first quarter on Thursday, driven in part by elevated demand related to artificial intelligence applications.
The company posted a record-high net profit of T$572.48 billion, or $18.15 billion, for the three months ended March 31, exceeding Bloomberg’s estimate of T$542.38 billion. The result represented a 58.3% increase from the year-ago quarter. Revenue for the period rose by 35% to T$1.134 trillion in Q1.
Although TSMC’s near-term performance was robust, management cautioned that disruptions in chemical and energy supplies tied to the ongoing Middle East war could potentially weigh on profitability. The warning was framed as a prospective risk, with the company indicating such impacts seemed unlikely to materialize in the immediate term.
Market implications and near-term focus
Investors are weighing a cluster of cross-cutting developments: diplomatic signals that could dampen risk premia and reduce energy-related inflationary pressures; fresh data showing solid growth in China; and corporate results that, so far, have exceeded tempered expectations. The balance between these elements will likely shape short-term moves in equities, oil and supply-sensitive sectors such as semiconductors and shipping.
As the U.S. earnings calendar accelerates and negotiators continue to pursue talks aimed at extending or formalizing a detente, market participants will be watching for firm details about follow-up meetings, any confirmed ceasefire agreements, the evolution of oil flows through the Strait of Hormuz, and further commentary from major corporates reporting results this week.
Key points
- U.S. futures climbed modestly amid optimism about renewed U.S.-Iran talks and constructive early earnings commentary; Japan’s Nikkei hit a record high while European stocks inched up.
- Oil prices remain below $100 a barrel despite modest gains, as traders weigh the potential impact of disruptions in the Strait of Hormuz alongside hopes for an extension of the ceasefire.
- China’s Q1 GDP grew 5% year-on-year, outpacing expectations, and TSMC posted a record quarterly net profit of T$572.48 billion, although it flagged potential supply risks tied to the Middle East conflict.
Risks and uncertainties
- Ceasefire progress is not finalized - no formal long-term deal has been signed, and any collapse in negotiations could reignite risk premia, affecting oil markets and energy-sensitive industries.
- Maritime restrictions and U.S. naval actions around Iranian ports could continue to create volatility in shipping and crude flows through the Strait of Hormuz, with implications for global energy prices.
- Supply-chain vulnerabilities: TSMC warned that interruptions in chemical and energy supplies related to the Middle East war could hurt profitability, particularly for sectors dependent on uninterrupted production inputs.
Bottom line
Markets are navigating a mix of diplomatic developments, macroeconomic data and corporate earnings. While diplomatic hope has supported risk assets and capped oil’s rally below $100, key uncertainties remain around the finalization of any ceasefire, the security of maritime routes, and potential downstream impacts on corporate supply chains and energy-dependent production.