US stock index futures pointed to a softer open Wednesday as investors braced for a wave of megacap earnings and monitored a fresh climb in oil prices linked to renewed Middle East tensions. Futures on the Dow Jones Industrial Average and the S&P 500 fell 0.06% and 0.23%, respectively, while contracts for the tech-heavy Nasdaq-100 sank 0.60%, leading the retreat from a winning day on Wall Street the day before.
The pullback follows Tuesday's rebound, when the S&P 500 gained 0.89% to close at 7,509.20 and the Nasdaq Composite climbed a steeper 1.29% to 25,837.21. Investors are looking for evidence that spending on artificial intelligence (AI) infrastructure remains strong enough to justify elevated technology valuations, particularly after semiconductor stocks bounced sharply on Tuesday, while rising oil prices are reviving inflation concerns.
Crude is the swing factor. Brent crude climbed above $95 a barrel Wednesday after the U.S. carried out its 11th consecutive night of strikes on Iran. The move is keeping upward pressure on Treasury yields, with the yield on the U.S. 10-year Treasury note rising for a second consecutive session to 4.63% on Tuesday, its highest level since mid-May, as investors continued to assess developments in the Middle East and the renewed surge in oil prices.
Premarket Snapshot
| Instrument | Level | Change |
|---|---|---|
| S&P 500 futures (ES) | 7,527.25 | -0.23% |
| Dow futures (YM) | 52,412 | -0.06% |
| Nasdaq 100 futures (NQ) | 29,131.75 | -0.60% |
| US 10-Year Treasury yield | 4.632% | Near multi-week highs |
| WTI crude futures | $88.06/bbl | +4.41% |
| Brent crude futures | $94.90/bbl | +4.30% |
| Gold futures | $4,121.90 | +1.12% |
| US Dollar Index (DXY) | 101.18 | Steady/firm with yields |
| Cboe VIX | 17.41 | +2.11% |
| Bitcoin (BTC) | $65.905.91 | -0.37% |
US stocks in focus
Earnings dominate the single-stock story. Markets are entering one of the busiest stretches of earnings season, with Alphabet, Tesla, IBM, Texas Instruments, and AT&T all set to report Wednesday.
- Alphabet (GOOGL/GOOG): Reports after the close. Shares were moderately higher premarket as investors positioned for the AI-heavy print.
- Tesla (TSLA): Also reporting after the bell; a key read on EV demand and margins.
- Texas Instruments (TXN): Trading down more than 1.5% premarket ahead of its after-hours results.
- Super Micro Computer (SMCI): Shares surged in premarket trading after the AI server maker reported a record backlog.
- IBM: Scheduled to report Q2 results after a pre-earnings warning caused a brutal stock drop last week.
- GE Vernova (GEV), Philip Morris (PM), AT&T (T): All report before the bell; options are pricing sizable moves, with GE Vernova's weekly straddle priced for a move of 11% and Philip Morris priced for roughly 7%.
Asia: Tokyo powers higher on chip rebound
The Asian markets ended mixed on Wednesday. Japanese equities retreated after the previous session's strong advance. The Nikkei 225 extended its gains in the morning on the Tokyo Stock Exchange, with the advance briefly topping 1,300 points to reclaim the 67,000 level, as a rally in U.S. tech stocks the previous day sent a flood of buy orders into AI and semiconductor-related issues in Tokyo. The Nikkei 225 Index gave back all its gains in late trading before closing down 0.18% at 66,115.60, while the Tokyo Stock Price Index (TOPIX) rose 18.18 points to 4,033.13.
Hong Kong lagged the regional risk-on tone. The Hang Seng Index fell 0.95%, or nearly 240 points, to 24,892.66 on Wednesday as renewed geopolitical tensions dampened investor sentiment, outweighing support from gains in semiconductor stocks that tracked a strong rally on Wall Street.
Europe: Steady open, Airbus and Santander in focus
European bourses opened on a firm footing, building on the previous session's gains as investor sentiment remained resilient despite heightened uncertainty in the Middle East. The Euro Stoxx 50 and Stoxx 600 indices were up about 0.16% and 0.30%, respectively. Data was supportive: In economic data from the region, UK inflation eased to 2.6% in June from 2.8% in May, coming in below forecasts of 2.7%, helped by lower petrol and diesel prices.
Corporate news is driving the tape. Airbus soared more than 6% after the company unveiled a €5 billion share buyback programme and raised its guidance. Spanish lender Banco Santander reported second-quarter net income that exceeded analyst expectations as it continued to attract millions of new customers, while investors will also monitor earnings from Roche Holdings, Iberdrola, UniCredit, and TE Connectivity, among others, ahead of Thursday's European Central Bank (ECB) rate decision.
Key technical levels to watch
- S&P 500 (cash): Tuesday's close at 7,509.20 is the immediate pivot; futures point to a test of the prior session's breakout zone.
- Nasdaq Composite: The index has support at 23,700 and resistance at 27,000, with RSI diverging negatively against the price, indicating danger of a reaction downwards.
- US 10-year yield: 4.63% marks the highest level since mid-May; a sustained move above tightens financial conditions into earnings.
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What else is on the radar
Rate expectations remain hawkish-tilted. Policymakers have entered their customary blackout period ahead of next week's FOMC meeting, in which the central bank is widely expected to leave the federal funds rate unchanged, though expectations for tighter policy remain elevated beyond July, with traders assigning roughly a 68% chance of a rate increase at the September meeting. On the diplomatic front, speaking at the ASEAN Foreign Ministers' meeting in the Philippines, U.S. Secretary of State Marco Rubio said Washington remained committed to diplomacy but questioned Tehran's willingness to negotiate.
