The S&P 500 (^GSPC) is pointing higher Wednesday morning, with index futures extending gains session high of 0.7% as markets embrace optimism following President Trump’s decision to extend the ceasefire with Iran. The broader market closed Tuesday slightly lower, driven by what’s being interpreted as a hawkish tone at Fed Chair nominee Kevin Warsh’s confirmation hearing and Iran peace talk uncertainty. Wednesday’s premarket bounce in the S&P 500 (^GSPC) reflects a sigh of relief that the ceasefire held overnight amid what has been an on again, off again cycle. Tesla (Nasdaq: TSLA) reports earnings after the closing bell today, and the stock is higher in pre-market trading.
Wharton professor and Allianz Chief Economic Advisor El-Erian appeared on CNBC, suggesting Warsh will “err on the side of lowering rates earlier.” El-Erian further noted that Warsh “says Fed independence is essential” and that “independence will be protected if the Fed delivers on its dual mandate, particularly inflation.” On the question of scope, Warsh “draws a very clear line between monetary policy and other responsibilities, stressing that the Fed should stay in its lane.”El-Erian wrapped up his assessment on an approving note. “I think that statement is very well balanced,” he said. “Most people will agree with it.”
The 10-year Treasury yield at about 4.3%, down 3% over the past month, supports equity valuations.
Ceasefire Extension and the Oil Wildcard
President Trump extended the expiring ceasefire until Iran submits a new proposal for peace, with no specified end date. The geopolitical picture remains complicated. Three ships were attacked in the Strait of Hormuz within hours of each other even as the ceasefire held on paper, and Britain is hosting military planners from more than 30 countries starting Wednesday for talks aimed at reopening the strait. Oil jumped nearly 1% on the uncertainty, with WTI crude still elevated at roughly $101 per barrel after spiking to a 12-month peak of nearly $115 on April 7. S
Google’s AI Push Gives Tech a Reason to Rally
The technology catalyst for Wednesday comes from Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction). Google unveiled its Gemini Enterprise Agent Platform, adding new features including Memory Bank, Memory Profile, Agent Simulation, and Projects (a collaboration tool designed for workers to interact with AI agents alongside colleagues). Separately, Google unveiled eighth-generation TPUs that split training and inference into dedicated chips, with the training chip delivering 2.8 times the performance of the seventh-generation Ironwood TPU at the same price. DA Davidson analysts estimated the TPU business coupled with Google DeepMind would be worth about $900 billion. Technology carries a about 33% weight in SPY, making any sustained move in mega-cap tech the dominant driver of the index.
Stocks to Watch
United Airlines (NASDAQ: UAL) is trading slightly after after revealing plans to lower its capacity on rising jet-fuel prices.
Tesla’s (Nasdaq: TSLA) are earnings after the close today for the first read on how Big Tech is navigating tariff uncertainty and capital spending pressures. The markets are also awaiting results from GE Vernova and ServiceNow.
The Rotation
One tension worth watching: investors pulled $15.4 billion from U.S. stocks in March while buying heavily into Europe and Japan, according to Bank of America, with total U.S. outflows over the past year reaching $284 billion. Active funds are now most overweight Europe and underweight the U.S. Healthcare attracted strong buying while tech, especially software and AI, saw major selling. That dynamic explains why the Nasdaq’s year-to-date gain of roughly 5% trails the Russell 2000’s roughly 12% year-to-date advance, even as large-cap tech names dominate the index by weight.
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