“Oil prices retreated slightly from their 18-month highs amid rumours that Iran may be willing to have discussions with the US to end the conflict," noted Axel Rudolph, Chief Technical Analyst at investing and trading platform IG.

"TTF gas prices slumped by 9% following this week's 60% surge while gold and silver prices regained some of Tuesday's sharp losses as the US dollar weakened slightly."

US services sector activity accelerated in February, with the Institute for Supply Management’s Services PMI rising to 56.1, its highest level since 2022 and well above expectations for a 53.5 reading.

The stronger-than-expected print points to solid expansion across the services economy, which accounts for the bulk of US economic activity.

At the same time, inflation pressures showed signs of easing. The ISM Services Prices Paid Index fell to an 11-month low of 63, indicating a moderation in input cost growth even as overall activity picked up.

US stocks indices generally opened higher, after the Dow Jones dallied with a short drop into the red.

After half an hour of trading the Nasdaq has climbed 0.8%, the S&P 500 was up 0.4% and the Dow 0.2%.

Coinbase was top risers on the S&P, up 11.4% as bitcoin rebounded.

Robinhood Markets was next, up 8%, with other included Applovin, Aristsa, Datadog, Western Digital and Seagate Technology.

Earlier today, US Treasury Secretary Scott Bessent reiterated his boss's promise that the US will try to help oil shipments in the Gulf region.

Defence Secretary Pete Hegseth also said "more forces are arriving" in the region, while Iran continued its retaliatory strikes on neighbouring countries for a fifth day.

US media reported that executives from US defence groups, including Lockheed Martin and RTX have been summoned to the White House on Friday to discuss ramping up production of missiles and other weaponry, despite President Trump's comments yesterday that the US had a "virtually unlimited supply".

US futures were pointing to a flat to marginally lower open on Wall Street on Wednesday, with the mood seeming to be one of slightly weary stabilization more than any real conviction.

Dow Jones futures were off around 77 points, S&P futures down 5 points and the Nasdaq barely changed, before minutes later the Nasdaq was up 0.2% and the Dow was back to flat.

The picture has shifted considerably through the early hours and into the morning, with futures seeing deeper losses erased before pushing into the green during the European session, only to fade again.

There were some reasons for some cautious optimism, with gains on European markets, including a 1.75% rise for the German DAX and 0.8% rebound in London for the FTSE 100.

The tentative tone follows a session when the Nasdaq led the decline, sliding 1% to 22,516.69, the Dow ended down 0.8% at 48,501.27, and the S&P fell 0.9% to 6,816.63. with all three indexes clawed back significant ground from their intraday lows.

"Investors continue to grapple with the inflationary implications of surging oil prices," said market analyst David Morrison at Trade Nation, as the threat of drones and missiles from Iran has effectively blocked traffic through the Strait of Hormuz.

President Donald Trump said yesterday that the US would provide risk insurance and potentially naval escorts for tankers navigating the Persian Gulf to restore crude flows. But he does not seem to have done enough to calm nerves.

Today sees the release of the ISM services PMI and the ADP private payrolls report, ahead of Friday’s official non-farm payrolls.

On the corporate front, CrowdStrike shares are flat after its earnings overnight, while today sees numbers from Broadcom after the bell, Abercrombie & Fitch, Brown Forman and Okta.

Kenny Polcari at SlateStone Wealth noted the VIX rose another 9% on the day, after earlier spiking almost 25%, and said markets "won't fully calm down until the conflict in the Middle East ends."