US Stock Futures Jump on Reports of Preliminary US-Iran Peace Deal Despite Fed’s Hawkish Outlook

U.S. stock index futures surged Wednesday evening after reports indicated that U.S. President Donald Trump and Iranian President Masoud Pezeshkian had signed a preliminary agreement aimed at ending the months-long conflict between the United States and Iran.

The positive geopolitical development helped futures markets recover from a weak Wall Street session that was heavily influenced by the Federal Reserve’s increasingly hawkish stance on inflation and interest rates.

As of 20:07 ET (00:07 GMT), S&P 500 Futures climbed 0.8% to 7,556.75, while Nasdaq 100 Futures advanced 1.4% to 30,400.50. Dow Jones Futures also moved higher, gaining 0.6% to 52,247.0.

According to reports from major media outlets including Axios, BBC, and CBS, Trump confirmed the signing of a memorandum of understanding during a state visit to France. Iranian President Masoud Pezeshkian reportedly signed the same agreement, marking a significant step toward de-escalating tensions that have disrupted global markets for nearly four months.

The preliminary accord reportedly calls for an immediate cessation of hostilities, including military activities in Lebanon, the reopening of the Strait of Hormuz, and the removal of the U.S. naval blockade on Iran. However, the agreement is not a final peace treaty and opens a 60-day negotiation period between Washington and Tehran. Discussions surrounding Iran’s nuclear program are expected to remain a central focus, with the United States seeking stronger assurances that Tehran will not pursue nuclear weapons development.

Despite the breakthrough, Trump warned that U.S. military action could resume if Iran fails to comply with the agreement. Nevertheless, investors viewed the development positively, sending oil prices lower and boosting risk appetite across financial markets.

Earlier in the day, Wall Street closed sharply lower after the Federal Reserve left interest rates unchanged but signaled the possibility of future rate increases. The meeting, the first chaired by Kevin Warsh, revealed that at least nine policymakers expect an interest rate hike before the end of 2026.

Warsh emphasized the central bank’s commitment to restoring price stability and hinted at changes in how the Fed communicates monetary policy. Markets interpreted his remarks as strongly hawkish, increasing expectations for a potential 25-basis-point rate hike by late 2026.

The S&P 500 fell 1.2%, the Dow Jones Industrial Average declined 1%, and the Nasdaq Composite dropped 1.35% during Wednesday’s trading session. Treasury yields also moved higher following the Fed meeting, adding pressure on equities.

Federal Reserve officials cited persistent inflation concerns, partly fueled by elevated energy prices during the Iran conflict, as a key reason for maintaining a cautious stance. Recent strength in the U.S. labor market has also provided policymakers with greater flexibility to keep monetary policy restrictive if inflation remains elevated.

While the Fed’s outlook continues to weigh on investor sentiment, optimism surrounding a potential end to the U.S.-Iran conflict helped drive a strong rebound in stock futures, signaling improved market confidence heading into the next trading session.