Sentiment improved after US president Donald Trump said Washington could soon secure a peace agreement to end the war with Iran, while urging the Tehran-backed Hezbollah group to respect a 10-day truce that had taken effect between Lebanon and Israel.
The prospect of de-escalation encouraged investors to buy risk assets, including battered technology and software stocks. Analysts said a broader risk-on move could persist even without an immediate peace deal, provided investors remain confident that a resolution is ultimately within reach.
“A resolution is more likely than not over the coming weeks even if the path is unlikely to be a straight line,” analysts at Deutsche Bank wrote.
At 5:01am ET, Dow E-minis jumped 168 points, or 0.34%, US S&P 500 E-minis rose 13.5 points, or 0.19%, and Nasdaq 100 E-minis were up 28.5 points, or 0.11%.
However, caution around the weekend talks between US and Iranian officials lingers and any breakdown could reignite volatility.
Moreover, passage through the Strait of Hormuz remains disrupted, keeping oil prices nearly 36% above pre-war levels even as the S&P 500 and the Nasdaq Composite fully recovered their earlier losses.
With no major economic data scheduled for release on Friday, investors are likely to focus more on corporate earnings, which so far this week have pointed to a resilient US consumer.
Notable movers in the premarket session included Netflix, which fell 9.3% after forecasting current-quarter earnings below expectations.
The slide comes as co-founder and longtime chairman Reed Hastings steps down, marking an end to a 29-year tenure.
Alcoa fell 2.3% after the aluminum producer reported first-quarter profit and revenue below analyst estimates, citing elevated costs and softening demand.
Central bank commentary will also be in focus, with San Francisco Fed President Mary Daly, Richmond Fed President Tom Barkin, and Federal Reserve Governor Christopher Waller scheduled to speak.
However, recent remarks from Fed officials have had limited impact on rate expectations.