S&P 500 sits under 1% of its all-time high.

Market snapshot

S&P 500 futures were essentially unchanged in early Wednesday trading, leaving the broad index less than 1% shy of its record closing level. The benchmark closed Tuesday after a strong session that pushed the index nearer to the 7,002.28 peak set on Jan. 28. Nasdaq 100 futures and Dow futures were also trading flat, signaling a quiet start to the midweek session.

Tensions overseas and a fresh wave of corporate earnings are both on investors' minds. Traders are weighing hopes for easing geopolitical tensions against the fact that major banks and some tech suppliers are set to report earnings before the market opens. This combination explains why futures trading is so quiet.

Recent gains and breadth

The S&P 500 logged its ninth positive day in 10 sessions on Tuesday, while the Nasdaq Composite notched 10 consecutive days of gains. Those streaks have pushed market internals in one direction: momentum. The S&P rose 1.18% on Tuesday. The Nasdaq Composite jumped 1.96%, and the blue-chip Dow added 317.74 points, or 0.66%.

That climb erased losses tied to late-February geopolitical developments. For many market participants, the question has shifted from whether stocks can rally to whether this run has room to keep going, especially with the index approaching the January high.

What's driving sentiment

Investors moved higher after signs that talks between Washington and Tehran may be opening again. President Donald Trump said on Monday, "We've been called by the other side.

They'd like to make a deal very badly." Those comments helped calm immediate fears tied to the conflict that had weighed on returns, and traders recycled money into sectors that had lagged.

Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, told CNBC on Tuesday that he doesn't expect the conflict to be over. "I don't think we're done with the conflict yet. I think there are plenty of concerns still out there," Schutte said. He added that despite lingering risks, long-term investors may find opportunity in areas that haven't kept pace during the market's narrow advance.

Futures versus cash market: what to watch

Futures trading offers a preview of the cash market, but it's not the whole story. When futures are flat, it usually means traders are waiting for fresh data — or earnings — before committing new capital. That's the posture this morning: steady futures, but lots of potential catalysts on the calendar.

Import and export price indexes for March will arrive during the trading day, and that data can affect outlooks for inflation and margins. Corporate earnings ramp up too: Bank of America, Morgan Stanley, PNC Financial and ASML are among firms due to report before Wednesday's open. Their results could shift sector leadership quickly.

Sector dynamics and leadership

Technology has powered much of the rally — the Nasdaq's streak speaks for itself — but other areas are drawing interest as money rotates. Value names that lagged in the narrow market rally have seen inflows as investors hunt for bargains. Financials are on watch because of the heavy slate of bank reports this week.

That rotation is partly practical. When the market's gains concentrate in a handful of mega-cap tech names, the next leg of a broader advance often needs participation from mid- and small-cap stocks. Schutte suggested that intermediate- to long-term investors can look at companies that haven't outperformed recently as potential contrarian opportunities.

Risks and caution points

Hang on though — the path forward isn't guaranteed. Geopolitical headlines can flip sentiment in a heartbeat. Even with the comments about talks, Schutte warned that the conflict isn't resolved and that risks remain. Volatility could return if talks stall or new developments emerge.

Another key focus right now is earnings season. If large banks report weaker-than-expected trading revenue or show strains in consumer lending, the market could reassess valuations quickly. Conversely, stronger-than-expected results from firms like ASML, which supplies critical equipment to chipmakers, could reinforce the tech-led advance.

Historical context and what the S&P record means

Reaching or topping a previous all-time high carries both symbolic weight and practical implications. A record close often draws media attention and can attract momentum-driven flows. Yet markets can stall near prior peaks as investors take profits and reassess whether valuations already price in growth and margin assumptions.

Point is, hitting a record doesn't change fundamentals overnight. Earnings, interest rates, and geopolitical events still set the backdrop. The S&P's proximity to 7,002.28 puts more psychological focus on upcoming data and earnings, not least because the index has regained ground lost after late-February tensions.

Investment strategies now

Strategies really depend on how long you plan to invest. Short-term traders often look to event risk — earnings beats or misses, surprise inflation prints — to trade volatility. Longer-term investors tend to emphasize diversification and selective buying in sectors that haven't run. Schutte recommended leaning into names that haven't performed strongly over the past few years for intermediate- to long-term portfolios.

Risk management remains key. Using stop-losses, managing position sizes, and watching how holdings relate can help when markets shift quickly after news. If you're eyeing the record, patience might be wise since the index has stalled near highs before as investors took time to process new information.

What to watch today

Traders will monitor the major bank earnings and ASML's report, plus the import/export price indexes. Any surprise in inflation measures could change Fed expectations and reprice equities. Also keep an eye on headlines related to U.S.-Iran contacts; market calm could prove fragile if talks don't progress.

Sure, the futures market is quiet now. But that quiet can break sharply once earnings or economic data land. Be ready for speed, and expect leadership to shift across sectors depending on results and news flow.

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President Donald Trump said: "We've been called by the other side. They'd like to make a deal very badly."