May 29 (Reuters) - U.S. stock index futures were steady on Friday, after closing at record highs in the previous session, with markets awaiting details on reports that the U.S. and Iran has reached a deal.
Sources told Reuters that Washington and Tehran had agreed to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, but President Donald Trump was yet to approve it.
"Markets are heading into the weekend in a good position as risk appetite has improved as geopolitical
fears ease and inflation data avoids a major upside surprise," said Daniela Hathorn, senior market analyst at Capital.com.
"However, positioning remains optimistic, valuations are elevated and much of the recent rally still relies on assumptions that tensions continue to de-escalate and earnings remain resilient. That means investors are likely to remain highly sensitive to both geopolitical headlines and incoming inflation data in the weeks ahead."
At 04:46 a.m. ET, Dow E-minis were up 37 points, or 0.07%, S&P 500 E-minis were up 2.5 points, or 0.03%, and Nasdaq 100 E-minis were down 6 points, or 0.02%.
Despite some concerns surrounding the economic impact of the Iran war on inflation and global growth, Wall Street's major indexes have been on a record run driven by revived optimism around AI and strong earnings growth expectations.
Dell surged 38.5% before the bell, after raising full-year profit and revenue forecasts. Peers Hewlett Packard Enterprise and Super Micro Computer gained 17.2% and 11%, respectively.
The S&P 500 was on track for a ninth consecutive weekly gain, its longest winning streak since December 2023. The Dow Jones and the Nasdaq were also set to end the week higher.
Economic data on Thursday showed U.S. inflation increased at its fastest pace in three years in April, while U.S. GDP for the first-quarter was revised lower to a 1.6% annual rise.
Money markets expect the Federal Reserve to keep interest rates steady for the rest of the year, with some expectations of a 25 bps hike in December.
U.S. central bankers have said in recent days that there might be a case for raising interest rates if inflation does not ease soon, while expressing skepticism over AI's ability to aid that process.
Investors will keep an eye on comments from Fed presidents Anna Paulson, Neel Kashkari and Mary Daly through the day to gauge monetary policy path forward.
Among other movers, Gap shares tumbled 15% after the apparel retailer cut its annual sales forecast, signaling pressure from budget-strained Americans.
Okta rose 8.1% after the digital identity verification firm posted first-quarter revenue above expectations.
(Reporting by Twesha Dikshit; Editing by Joyjeet Das)
