Futures Pointing To Initial Rebound On Wall Street

(RTTNews) - The major U.S. Index futures are currently pointing to a higher open on Thursday, with stocks likely to regain ground after coming under pressure late in the previous session.

Early buying interest may be generated in reaction to news the U.S. and Iran have officially signed a preliminary agreement to end the Middle East war.

U.S. President Donald Trump and his Iranian counterpart Masoud Pezeshkian have each signed the memorandum of understanding setting up negotiations to reach a permanent peace deal

The MoU will enter into force with immediate effect and as a first step, Iran will reopen the Strait of Hormuz and the United States will lift the naval blockade of Iranian ports.

As per the 14-point framework deal, the U.S. and Iranian teams will begin talks to reach a final deal over the next 60 days.

The news has contributed to a steep drop by the price of crude oil, with crude oil futures pulling back further toward the levels seen before the war began in late February.

"That has huge significance for inflation and interest rates, as well as business, consumer and investor sentiment," said Russ Mould, investment director at AJ Bell. "It takes the pressure off industries and households and is hugely positive for global economic growth."

Intel (INTC) may help lead an early rally by semiconductor stocks, with the chipmaker soaring by 8.5 percent in pre-market trading.

The surge by Intel comes after Trump said in a post on Truth Social that Apple (AAPL) has agreed to work with the company to design and build its chips in the U.S.

Stocks saw significant volatility immediately following the Federal Reserve's monetary policy announcement on Wednesday but came under considerable selling pressure in the latter part of the trading session.

The major averages all showed significant moves to the downside, closing firmly in negative territory. The Nasdaq plunged 354.69 points or 1.3 percent to 26,021.66, the S&P 500 tumbled 91.25 points or 1.2 percent to 7,420.10 and the Dow slumped 507.12 points or 1 percent to 51,492.55.

The weakness that emerged on Wall Street came after the Fed left interest rates unchanged as widely expected, but officials' projections suggest some see the possibility rates could be higher by end of the year.

The Fed said it decided to maintain the target range for the federal funds rate at 3.5 to 3.75 percent, citing its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.

The median projection suggests officials expect interest rates at 3.8 percent by the end of 2026, hinting at a possible rate hike compared to the rate cut forecast in March.

In a significantly pared down statement, the Fed said economic activity is expanding at a solid pace despite elevated uncertainty due in part to the conflict in the Middle East.

The statement also noted inflation remains elevated relative to the Fed's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.

Earlier in the day, the Commerce Department released a report showing retail sales in the U.S. increased by much more than expected in the month of May.

The Commerce Department said retail sales grew by 0.9 percent in May after rising by a downwardly revised 0.4 percent in April.

Economists had expected retail sales to climb by 0.5 percent, matching the increase originally reported for the previous month. Software stocks moved sharply lower over the course of the session, dragging the Dow Jones U.S. Software Index down by 3.2 percent to its lowest closing level in two months.

Substantial weakness was also visible among transportation stocks, with the Dow Jones Transportation Average plunging by 3 percent.

Retail stocks also saw significant weakness despite better-than-expected retail sales data, resulting in a 2.9 percent slump by the Dow Jones U.S. Retail Index.

Oil service, gold, commercial real estate stocks also came under pressure on the day, while brokerage and semiconductor stocks bucked the downtrend.

Commodity, Currency Markets

Crude oil futures are tumbling $1.62 to $75.17 a barrel after climbing $0.74 to $76.79 a barrel on Wednesday. Meanwhile, after increasing $27 to $4,381.40 an ounce in the previous session, gold futures are plunging $104.90 to $4,276.50 an ounce.

On the currency front, the U.S. dollar is trading at 160.87 yen versus the 160.63 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1466 compared to yesterday's $1.1499.

Asia

Asian stocks ended mixed on Thursday, with Japanese and South Korean markets reaching fresh records on signs of easing geopolitical tensions and investor enthusiasm for artificial intelligence.

A cautious undertone prevailed elsewhere across the region after the U.S. Federal Reserve hinted at a possible interest rate hike this year.

The dollar rallied in Asian trading on the back of hawkish Fed bets and upbeat retail sales and housing data released overnight.

Gold traded nearly 1 percent higher below $4,300 an ounce while Brent crude futures fell almost 2 percent toward $78 a barrel.

China's Shanghai Composite Index dropped 0.4 percent to 4,090.48 on worries about possible rate hikes in the U.S. Hong Kong's Hang Seng Index tumbled 1.6 percent to 23,924.81, extending losses for a third consecutive session.

Japanese markets rallied after reports emerged that the U.S.-Iran peace agreement has been finalized and digitally signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian.

Both countries released the text of the agreement, which seeks to extend a ceasefire announced in April by another 60 days to allow room for negotiations.

The Nikkei 225 Index surged 1.7 percent to 71,053.49, rising above 71,000 for the first time and extending its record-breaking run to a fourth session.

The broader Topix Index settled 1.4 percent higher at 4,068.18. Artificial intelligence and semiconductor-related stocks topped the gainers list, reflecting overnight gains in the U.S. SOX Philadelphia semiconductor Index.

Seoul stocks reached a new peak as chipmakers hit record highs on AI optimism. The Kospi Index jumped 2.3 percent to 9,063.84, breaching the 9,000 milestone for the first time. Market bellwether Samsung Electronics surged 4.6 percent and SK Hynix spiked 6.5 percent.

Australian markets fell notably to snap a four-day winning streak. The benchmark S&P/ASX 200 Index dropped 0.6 percent to 8,911.10, after having hit a two-month high in the previous session. The broader All Ordinaries Index closed 0.6 percent lower at 9,126.80.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.2 percent to 13,363.31, extending losses from the previous session despite first quarter GDP data matching expectations.

Europe

European stocks are mixed on Thursday after the U.S. Federal Reserve left interest rates unchanged as widely expected, but the latest set of projections suggested there could be at least one increase to its main rate this year.

Elsewhere, the Swiss National Bank left its policy rate unchanged at zero percent despite rising inflation. The Bank of England also kept interest rates unchanged at 3.75 percent.

Meanwhile, official data showed earlier in the day that the U.K. unemployment rate ticked down to 4.9 percent in the three months to April from 5.0 percent in the three months to March. Payroll employment increased after three consecutive monthly declines.

While the U.K.'s FTSE 100 Index is down by 0.9 percent, the French CAC 40 Index is just above the unchanged line and the German DAX Index is up by 0.2 percent.

French cosmetics group L'Oreal has moved notably lower after it signed an agreement to acquire a majority stake in India's personal care startup Innovist.

Tesco, the U.K.'s biggest retailer, has also tumbled after sales growth slowed sharply in the fiscal first quarter.

Shares of energy giants BP Plc and Shell have also slumped as Brent crude futures fell toward $78 a barrel amid easing geopolitical tensions.

Meanwhile, FirstGroup shares have soared as the British transport operator reported solid annual results and announced a new £100 million share buyback.

Informa, the world's largest exhibitions group, has also surged after reporting 6.4 percent underlying revenue growth in a five-month trading update and backing its annual outlook.

U.S. Economic News

A report released by the Labor Department on Thursday showed a modest pullback in first-time claims for U.S. unemployment benefits in the week ended June 13th.

The Labor Department said initial jobless claims dipped to 226,000, a decrease of 4,000 from the previous week's revised level of 230,000.

Economists had expected jobless claims to edge down to 225,000 from the 229,000 originally reported for the previous week.

Meanwhile, the report said the less volatile four-week moving average crept up to 223,250, an increase of 4,000 from the previous week's revised average of 219,250.

Philadelphia-area manufacturing activity expanded overall in the month of June, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index for current general activity shot up to a positive 10.3 in June from a negative 0.4 in May, with a positive reading indicating growth. Economists had expected the index to jump to a positive 10.0.

Looking ahead, the diffusion index for future general activity fell to 50.2 in June from 53.2 in May, although the Philly Fed said firms continue to expect overall growth over the next six months.

At 10 am ET, the Conference Board is scheduled to release its report on leading economic indicators in the month of May. The leading economic index is expected to inch up by 0.1 percent in May, matching the uptick seen in April.

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