Most Asian markets traded lower early Wednesday amid a worsening geopolitical situation in the Middle East.

Geopolitical tensions remained the undercurrent in the market as major index futures traded nearly flat in the overnight session. 

As the strife between Israel and Iran entered its sixth day, the market took stock of President Donald Trump’s call for Iran’s “unconditional surrender” and a couple of other related posts on his Truth Social handle.

Trump said Iran’s “Supreme Leader” is an “easy target,” but the U.S. wasn’t looking to take him down at this juncture. 

“But we don’t want missiles shot at civilians, or American soldiers. Our patience is wearing thin,” he warned.

He also claimed the U.S. now had complete control of the skies over Iran.

Trump is weighing a range of potential actions in response to the conflict, including a possible U.S. strike against Iran, and met with top White House advisers to discuss the matter on Tuesday, the Wall Street Journal reported.

As of 11:15 p.m. ET, the S&P 500, the Nasdaq 100 and Dow futures were marginally higher, while the Dow futures edged down 0.13%.

Crude oil futures climbed nearly 5% on Tuesday amid escalating Middle East tensions. They pulled back slightly overnight but held above the $73-a-barrel mark. Gold futures slipped moderately, below the $3,400-an-ounce mark.

The 10-year Treasury yield stayed below 4.40% ahead of the Fed’s rate decision. On Tuesday, however, the yields slipped 5.9 basis points due to some weak data.The dollar was weaker across the board.

Most Asian markets traded lower early Wednesday amid a worsening geopolitical situation in the Middle East.

On  Tuesday, U.S. stocks languished below the unchanged line, with the sell-off worsening in the afternoon as Trump’s posts on the situation in the Middle East sapped risk appetite. 

Weak retail sales and industrial production data also weighed on sentiment, raising the specter of a potential recession. All sectors except energy closed lower for the session.

The Invesco QQQ Trust (QQQ) ETF and the SPDR S&P 500 ETF (SPY) slumped 0.98% and 0.85%, respectively.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) retreated 0.74%, while the iShares Russell 2000 ETF (IWM) fell a steeper 1.04%.

The Federal Open Market Committee’s (FOMC) rate decision will likely be in the spotlight, with the consensus expectation calling for a pause in the Fed funds rate at 4.25%-4.50%. The central bank will also release the Summary of Economic Projections and the dot-plot curve. 

Shortly after, Fed Chair Jerome Powell will host a press conference to explain the rate decision and offer insights into the rate outlook.

Fund manager Louis Navellier said the FOMC statement will be crucial. The strategist expects a dovish statement due to the weak Beige Book survey and tamer-than-expected inflation for the past four months. 

“I hope the FOMC statement will refer to better-than-expected inflation news rather than anticipating an inflation ‘bogeyman' that has not materialized,” he added.

Other noteworthy Main Street catalysts are the weekly jobless claims report and the Commerce Department’s housing starts data for May, both due at 8:30 a.m.ET.

Korn/Ferry (KFY) and Smith Wesson Brands (SWBI) are among the companies that will release their earnings reports on Wednesday.

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