Wall Street Mixed as Focus Shifts to Tech and Fed Policy

EUR/USD traded modestly higher near 1.1720 during Tuesday’s early Asian session, supported by mild buying interest in the euro. However, gains remained limited as investors stay cautious amid unresolved tensions between the United States and Iran, while attention shifts to key central bank meetings later this week.

According to reports, Iran has proposed reopening the Strait of Hormuz if the United States lifts its blockade and military hostilities come to an end. The proposal would delay broader discussions surrounding Iran’s nuclear program.

Despite the offer, market participants remain skeptical of a breakthrough. US President Donald Trump is seen as unlikely to accept the terms, while Secretary of State Marco Rubio reportedly dismissed any agreement that excludes Iran’s nuclear ambitions. Continued geopolitical uncertainty and risks surrounding the Strait of Hormuz could increase demand for safe-haven assets, providing support for the US dollar and limiting upside in EUR/USD.

Investors are now focused on the Federal Reserve’s policy decision on Wednesday. The US central bank is widely expected to leave interest rates unchanged at 3.50% to 3.75%, marking a third consecutive pause.

Markets will closely watch Fed Chair Jerome Powell’s post-meeting remarks for guidance on the future policy path. Any indication that rates may stay elevated for longer—or that further tightening remains possible—could strengthen the dollar in the near term.

Attention will then turn to the European Central Bank on Thursday. Economists broadly expect the ECB to keep its deposit rate unchanged at 2.0%, where it has remained since June last year.

Gold prices continued to trade with a negative tone below the $4,700 level early on Tuesday,.

The precious metal remains pressured as renewed uncertainty surrounding US-Iran peace negotiations supports demand for the US dollar, reducing appetite for non-yielding assets such as gold.

Market sentiment weakened after hopes for a diplomatic breakthrough faded. US President Donald Trump reportedly canceled a planned visit to Pakistan by special envoy Steve Witkoff and Jared Kushner, signaling setbacks in ongoing efforts to ease tensions.

At the same time, Iran is said to have submitted a revised proposal that postpones discussions on its nuclear program until the war ends and disputes over Gulf shipping routes are resolved. However, reports suggest the White House views the proposal as insufficient, particularly on nuclear concerns.

Still, downside in bullion may remain limited as traders increasingly expect the Federal Reserve to adopt a softer policy stance in coming months. According to market pricing, investors see a meaningful chance of at least one US rate cut by year-end, which could cap further gains in the dollar.

Attention is now firmly on the Federal Open Market Committee meeting, which begins Tuesday, with the policy decision due Wednesday. Investors will closely monitor comments from Fed Chair Jerome Powell for clues on the future direction of interest rates.

Any dovish signals from the Fed could support gold, while a more hawkish tone may extend the metal’s recent weakness.

Oil prices moved higher on Tuesday, extending recent gains as diplomatic efforts to end the conflict between the United States and Iran showed little progress, while disruptions in the Strait of Hormuz continued to tighten global supply expectations.

The key shipping route, which handles roughly 20% of global oil and gas consumption, remains largely restricted, limiting exports from one of the world’s most important energy-producing regions.

The lack of progress has left negotiations at a standstill, with Iran maintaining restrictions on shipping through the Strait of Hormuz, while the United States continues its blockade of Iranian ports.

Earlier attempts to restart negotiations collapsed last week after direct talks between Washington and Tehran failed to produce an agreement.

Analysts say traders are now focused less on political rhetoric and more on the actual movement of crude through the Strait of Hormuz, where flows remain constrained.

Ship-tracking data has already shown significant disruption, including several Iranian oil tankers reportedly forced to turn back due to the ongoing US blockade.

Before the conflict began on February 28, an estimated 125 to 140 vessels passed through the Strait of Hormuz each day, highlighting the scale of the current disruption to global energy markets.

US stock futures moved modestly higher on Monday evening after major Wall Street indexes ended the regular session at fresh record highs, while investors assessed developments surrounding Iran’s proposal to reopen the Strait of Hormuz.

Investor sentiment was cautiously supported after the White House said President Donald Trump had reviewed a new Iranian proposal aimed at easing the ongoing conflict.

The proposal reportedly includes reopening the Strait of Hormuz — a critical route for global energy shipments — while delaying more sensitive negotiations related to Iran’s nuclear program.

Despite geopolitical uncertainty, US equities continue to draw support from strong momentum in large-cap technology shares and optimism surrounding artificial intelligence-led growth.

Investor attention now turns to a busy corporate earnings week, with several major technology companies set to report results, including Microsoft, Apple, Amazon, Alphabet, and Meta Platforms.

More than one-third of S&P 500 companies are scheduled to release quarterly earnings this week, with analysts expecting another solid reporting season.

Before Tuesday’s opening bell, earnings are also due from United Parcel Service, General Motors, Coca-Cola, and JetBlue Airways.

Markets are also preparing for the Federal Reserve policy meeting this week. While interest rates are widely expected to remain unchanged, investors will closely watch comments from Chair Jerome Powell for signals on the future path of monetary policy.