US STOCKS-Wall St futures steady as investors weigh report on Iran-US talks
By Johann M Cherian and Ragini Mathur
March 4 (Reuters) - U.S. stock index futures edged higher on Wednesday as investors weighed a report signaling efforts to end the five-day Middle East conflict and took heart from President Donald Trump's efforts to stabilize oil markets.
Futures turned higher after a New York Times report said Iranian intelligence operatives indirectly reached out to the CIA a day after the attacks, but U.S. officials remain skeptical that either the Trump administration or Iran is prepared for a near-term de-escalation.
Travel stocks that are sensitive to oil prices edged higher after bearing the brunt of losses earlier this week. American Airlines UAL.O added 0.7% in premarket trading, while Carnival CCL.N and Norwegian Cruise NCLH.N climbed over 0.3% each.
Oil and gas producers such as Occidental OXY.N and NextDecade NEXT.O lost more than 2%.
"It's the kind of headline that everyone wants to see, because the idea that this would drag on for four or five weeks, at least in the U.S. estimation is not conducive to markets," said Chris Beauchamp, chief market analyst at IG.
"But you've got to be very cautious about believing it."
Tehran's threat to attack vessels navigating the strategic Strait of Hormuz pushed up shipping costs and worries are that crude prices could touch a worrying $100 a barrel. Several Middle Eastern countries have also temporarily halted oil and gas production.
However, President Trump's announcements of a U.S. Naval escort for oil tankers through the Strait of Hormuz and political risk insurance brought some relief.
New York Fed President John Williams also said on Tuesday the U.S. economy has proved to be resilient to energy price shocks. The U.S. oil-prices benchmark CLc1 was flat at $75 having gained 11.6% this week.
At 06:42 a.m. ET, Dow E-minis YMcv1 were up 48 points, or 0.10%, S&P 500 E-minis EScv1 were up 13 points, or 0.19%. Nasdaq 100 E-minis NQcv1 were up 71.75 points, or 0.29%.
The CBOE volatility index, also known as Wall Street's fear gauge .VIX dropped 0.5 points to 23.07 after four straight days of gains, while futures tracking the rate-sensitive Russell 2000 index RTYcv1 gained 0.4%.
After two volatile sessions for Wall Street, investors also scooped up technology stocks that sold off heavily in February. Nvidia NVDA.O added 1.2% and other chip stocks such as Sandisk SNDK.O and Applied Digital APLD.O were up more than 4% each.
Policymakers have acknowledged that the conflict will complicate the Federal Reserve's monetary policy outlook and Goldman Sachs GS.N CEO David Solomon said financial markets may take a while to fully digest the long-term repercussions.
Investors have pushed back expectations for a 25-basis-point interest rate cut to September from July, pricing in potential costs related to energy and U.S. tariffs that threaten to fuel inflation pressures.
Traditional safe-havens such as precious metals gained, lifting miners such as Endeavour Silver EXK.N up 3.5% and Gold Fields GFI.N up 2.9%.
Crypto stocks such as Strategy MSTR.O and Coinbase COIN.O added 6.8% and 5.5%, respectively, tracking a 4.4% jump in bitcoin BTC=.
Drugmaker Moderna MRNA.O added 6.9% after agreeing to pay up to $2.25 billion to settle a long-running legal fight over a COVID-19 vaccine patent.
The Fed's Beige Book, a district-by-district snapshot of economic conditions, is due later in the day, alongside ADP employment figures and the Institute for Supply Management business activity report for February.
