US stock futures edged higher on Friday as investors headed into the final session of the week hoping the worst of the Middle East shock may be passing, even if the market is not yet prepared to trade as though the crisis is over.

Wall Street has been supported this week by record closes and improving hopes that diplomacy with Iran could still gain traction, helping risk appetite hold up better than many expected.

The tone before the opening bell was constructive but careful.

Oil remains about 36% above its pre-war level, a reminder that while equities have recovered strongly, commodity markets are still pricing meaningful geopolitical risk.

5 things to know before Wall Street opens

1. Futures are higher, but not convincingly so

S&P 500 futures edged up 0.2% and Nasdaq 100 futures gaied 0.1%.

Dow Jones Industrial Average futures outperformed, rising 172 points, or about 0.35%, suggesting slightly stronger momentum in blue-chip stocks heading into the session.

The move suggests investors are still willing to buy risk heading into the weekend, but only selectively and without much conviction.

That caution is understandable. Stocks may be trading near record territory, yet the macro backdrop still looks fragile.

2. The Middle East is still the main macro story

The immediate support for sentiment is the belief that some form of de-escalation may now be achievable.

President Donald Trump said a peace deal with Iran could be secured within weeks and urged the Tehran-backed Hezbollah group to respect the 10-day truce between Lebanon and Israel.

That has helped investors look past the worst-case scenario, though not entirely.

Passage through the Strait of Hormuz remains disrupted, and that is why oil is still trading far above its level from before the war.

3. Earnings are now the day’s main test

With the economic calendar light, corporate results are likely to carry more weight than usual.

Netflix was in focus after its shares fell 9.3% in premarket trading, as investors reacted to slower growth guidance and the surprise announcement that co-founder Reed Hastings will step down as chairman.

The reaction matters because it shows how unforgiving the market can be when expectations are elevated.

This earnings season has broadly supported the rally so far, particularly in banks, but Netflix is a reminder that investors are no longer rewarding growth stories automatically.

4. Stock-specific moves show the market is becoming more selective

Netflix was not the only notable mover.

Alcoa fell 2.3% after reporting first-quarter profit and revenue below expectations, hurt by higher mining costs and softer demand from aerospace and automotive customers.

That combination of weaker pricing power and softer end-market demand is the kind of result investors are likely to punish in a market that is otherwise still priced for resilience.

5. Fed speakers are on the schedule, but probably not in charge

San Francisco Fed President Mary Daly, Richmond Fed President Tom Barkin and Governor Christopher Waller are all due to speak on Friday.

Under normal circumstances, that would be enough to make rates part of the day’s central narrative.

This time, though, markets appear more settled.

Traders are still broadly positioned for the Fed to leave rates unchanged for the rest of the year, and recent remarks from policymakers have done little to alter that view.

Unless one of Friday’s speakers breaks sharply from the current script, earnings and geopolitics are more likely to shape sentiment into the weekend.

The post Dow futures climb 175 points: 5 things to know before market opens appeared first on Invezz