U.S. stock index futures saw gains on Tuesday as traders remained hopeful for a de-escalation in the ongoing Middle East conflict. Investors are also awaiting fresh data on March’s producer prices and a busy slate of corporate earnings reports for further guidance.

U.S. President Donald Trump revealed on Monday that Iran had expressed an interest in negotiating a deal, although he emphasized that no agreement would be sanctioned if it allowed Tehran to acquire a nuclear weapon. Despite the uncertainties, the prospect of a potential diplomatic resolution was enough to fuel optimism among investors eager to seize any positive developments.

By 04:44 a.m. ET, Dow e-minis (YMcv1) climbed 74 points, or 0.15%, the S&P 500 e-minis (EScv1) gained 14.5 points, or 0.21%, and Nasdaq 100 e-minis (NQcv1) advanced by 107.75 points, or 0.42%.

Analysts at Deutsche Bank noted that, despite the ongoing tension, investor optimism remained intact. "Given the potential for further talks, investors remained hopeful that a de-escalation would be achieved, even as yesterday saw the U.S. blockade begin," they said in a note.

The U.S. military initiated a blockade of all maritime traffic entering or leaving Iranian ports after negotiations between Washington and Tehran failed to yield a resolution to the war. This action comes amid concerns that the conflict may escalate further.

Earnings Reports Take Center Stage

In addition to geopolitical concerns, traders are turning their attention to the earnings season. A slew of major financial firms, including JPMorgan Chase, Wells Fargo, Citigroup, BlackRock, and Johnson & Johnson, are scheduled to release their quarterly results on Tuesday, which could provide crucial signals on market direction.

Despite the complex macroeconomic backdrop, Anthony Saglimbene, Chief Market Strategist at Ameriprise Financial, remains cautiously optimistic. "Despite a messier macro backdrop, we believe the earnings season begins from a constructive fundamental starting point," he said.

He added that in the coming weeks, profit reports will need to demonstrate that earnings momentum is widespread enough, and guidance firm enough, to support stock prices, particularly following a period of heightened volatility and, in some cases, still elevated valuations.

In premarket trading, shares of Wells Fargo slipped by 0.8%, while Citigroup dipped 0.6%. JPMorgan Chase remained flat, BlackRock rose by 0.6%, and Johnson & Johnson fell 0.6%.

Producer Price Data and Federal Reserve Commentary Awaited

Another key event on the horizon is the release of the producer price index, which comes just days after data showed a significant rise in U.S. consumer prices in March. This surge was largely driven by a record jump in gasoline and diesel costs.

Later in the day, several Federal Reserve policymakers are set to speak, and their comments will be closely watched for insights into how the central bank views the impact of the ongoing U.S.-Iran conflict. Federal Reserve officials scheduled to speak include Chicago Fed President Austan Goolsbee, Boston Fed President Susan Collins, Fed Governor Michael Barr, Richmond Fed President Tom Barkin, and Philadelphia Fed President Anna Paulson.

Airlines See Gains Amid Merger Talks

In other market movements, shares of United Airlines and American Airlines rose by 1.5% and 4.3%, respectively. The boost came after reports revealed that United Airlines CEO Scott Kirby had pitched a potential merger with American Airlines to President Donald Trump in late February. However, such a deal would likely face significant regulatory scrutiny and hurdles.

The outlook for the U.S. stock market remains mixed as geopolitical tensions, economic data, and corporate earnings reports will continue to shape market sentiment in the days ahead.

-Reporting by Niket Nishant in Bengaluru; Editing by Rashmi Aich/Reuters