Global markets took a cautiously optimistic turn on Wednesday after President Donald Trump announced a temporary halt to a U.S. military operation aimed at unblocking the Strait of Hormuz and suggested that progress toward a peace agreement with Iran had been made. The news pushed futures tied to the main U.S. indexes higher and coincided with a pullback in oil prices, though crude remains elevated above $100 a barrel.
Futures and market tone
By 03:31 ET (07:31 GMT), futures contracts indicated gains across the major U.S. benchmarks. The Dow futures rose by 79 points, or 0.2%, S&P 500 futures climbed by 20 points, or 0.3%, and Nasdaq 100 futures increased by 186 points, or 0.7%.
Traders moved on hopes that the decision to pause the operation - which had been initiated earlier in the week and followed by renewed attacks in the strait and the wider Gulf region - could reduce the near-term risk premium priced into markets. The main U.S. averages had recorded modest gains in the prior session, and corporate earnings through the current reporting season have so far been broadly solid. This has offered some evidence that large companies have been able to absorb economic uncertainty linked to the conflict, at least for now.
Market participants are also looking ahead to a slate of results later this month for fiscal periods ending in April, including high-profile reports from the artificial intelligence semiconductor heavyweight Nvidia and big-box retailer Walmart.
Trump pauses "Project Freedom"
On Tuesday, Trump said the so-called "Project Freedom" initiative - a U.S. effort to use military assets to escort vessels through the Strait of Hormuz - would be suspended "for a short period of time." The operation had been put into effect earlier in the week and was quickly followed by another round of attacks in and around the strait.
In a social media post, Trump said the change was partially at the request of Pakistan, which he described as a frequent intermediary between Washington and Tehran. He also stated that "great progress" has been made toward a peace agreement with Iran.
Trump's announcement followed diplomatic engagement between the foreign ministers of Iran and China. Given China's role as a significant buyer of Iranian oil, media accounts have suggested Beijing may be seeking to dissuade Tehran from escalating tensions with the U.S. ahead of a planned meeting between Chinese leader Xi Jinping and Trump next week.
Oil reacts but stays elevated
Oil benchmark Brent retreated after the White House move, sliding 1.5% to $108.22 a barrel. Nonetheless, the contract remains well above levels seen prior to the onset of the conflict, when prices were around $70 a barrel.
The Strait of Hormuz continues to be effectively closed to tanker traffic, as it has for weeks, with both the U.S. and Iran having established blockades. The prolonged disruption to shipping through this critical chokepoint - which handles roughly a fifth of global oil flows - has deepened concerns about an energy shock that could push inflation higher and slow world growth.
AMD posts strong AI-driven quarter
Shares of Advanced Micro Devices climbed sharply in extended trading after the chipmaker posted quarterly results that beat expectations, driven by robust demand in its data center business tied to artificial intelligence workloads.
AMD reported first-quarter net income of $1.38 billion, up from $709 million in the year-ago period. On an adjusted basis, earnings per share were $1.37, above Wall Street forecasts of $1.28. Overall revenue rose 38% year-over-year to $10.25 billion, surpassing estimates, with the data center segment delivering a particularly strong performance - sales there increased by 57% as demand for EPYC processors and higher shipments of Instinct GPUs gathered pace.
Chief Executive Officer Lisa Su said server growth is expected to "accelerate meaningfully" as AMD scales up supply to satisfy high demand for its products.
Analysts remain attentive to how AMD's gains will stack up against competitors such as Nvidia and Broadcom. Strategists at BofA Securities noted that while they are "big believers in AMD's execution," the company remains exposed to "uncertain share allocation" among rivals supplying OpenAI, the startup behind the widely used AI model ChatGPT.
Samsung surpasses $1 trillion market value
South Korea's Samsung Electronics moved past a $1 trillion market valuation on Wednesday, driven by a rally in memory chip stocks and renewed optimism about potential manufacturing partnerships with major technology companies. Samsung is now the second Asian company to clear this threshold, behind contract chipmaker Taiwan Semiconductor Manufacturing Co.
The company’s shares have reached consecutive record highs, with prices more than doubling so far this year. The most recent surge was partly attributed to a media report that Apple has held exploratory talks with Samsung and Intel about producing the main processors for its devices. Samsung has benefited from a global upcycle in memory chips, where tight supply and strong demand for high-bandwidth memory used in AI systems have bolstered chip profits.
Implications for markets and investors
The market moves highlight how geopolitical developments, energy market mechanics, and the rapid adoption of AI technologies are jointly shaping risk sentiment and asset valuations. Oil's retreat following the pause in the military operation eased some immediate inflation concerns, while strong corporate results in the semiconductor space - most notably at AMD - underscored the tangible revenue upside companies tied to AI workloads are realizing. Meanwhile, the surge in Samsung's market value demonstrates how memory markets and speculation about industrial partnerships can lift large-cap tech equities.
Traders and portfolio managers will likely continue to weigh forthcoming corporate earnings against ongoing geopolitical uncertainty and the operational realities of supply allocation in technology supply chains.