U.S. Stocks May Move Back To The Upside On Upbeat Earnings News

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Wednesday, with stocks likely to move back to the upside following the pullback seen over the course of the previous session.

The markets may benefit from a positive reaction to some of the latest earnings news, as shares of McDonald's (MCD) are surging by 4.0 percent in pre-market trading.

The jump by McDonald's comes after the fast food giant reported second quarter results that exceeded analyst estimates on both the top and bottom lines.

Shares of Shopify (SHOP) are also seeing significant pre-market strength after the e-commerce platform reported better than expected second quarter revenues and provided upbeat third quarter guidance.

Entertainment giant Disney (DIS) is also moving higher in pre-market trading after reporting fiscal third quarter earnings that exceeded expectations.

On the other hand, shares of Super Micro Computer (SMCI) may come under pressure after the server maker reported weaker than expected fiscal fourth quarter results and provided disappointing first quarter guidance.

Social media platform Snap (SNAP) may also move to the downside after reporting second quarter revenues that missed analyst estimates.

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

After initially extending Monday's rally in early trading, stocks moved mostly lower over the course of the session on Tuesday. The major averages all moved to the downside, partly offsetting the previous session's strong gains.

The major averages all finished the day in negative territory. The Nasdaq slid 137.03 points or 0.7 percent to 20,916.55, the S&P 500 fell 30.75 points or 0.5 percent to 6,299.19 and the Dow edged down 61.90 points or 0.1 percent to 44,111.74.

The downturn on Wall Street may partly have reflected ongoing trade concerns following President Donald Trump's latest comments on tariffs.

In an interview on CNBC's "Squawk Box," Trump said he will be announcing new tariffs on semiconductors and chips as soon as next week, "because we want them made in the United States."

Trump also told CNBC planned tariffs on pharmaceuticals imported into the U.S. could eventually reach as high as 250 percent.

Negative sentiment may also have been generated in reaction to a report from the Institute for Supply Management unexpectedly showing a modest slowdown in the pace of growth by U.S. service sector activity in the month of July.

The ISM said its services PMI edged down to 50.1 in July from 50.8 in June. While a reading above 50 still indicates growth, economists had expected the index to rise to 51.5.

Early in the session, stocks benefitted from a positive reaction to some of the latest earnings news, including upbeat quarterly results from software company Palantir (PLTR).

Shares of Palantir surged by 7.9 percent after the company said its sales jumped almost 50 percent in the second quarter amid robust demand for artificial intelligence services.

Despite the pullback by the broader markets, oil service stocks showed a substantial move to the upside on the day, resulting in a 3.5 percent surge by the Philadelphia Oil Service Index.

Gold stocks also saw significant strength amid a modest increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.9 percent.

Housing and transportation stocks also saw notable strength on the day, while utilities and semiconductor stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are climbing $0.84 to $66 a barrel after tumbling $1.13 to $65.16 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,419.30, down $15.40 compared to the previous session's close of $3,434.70. On Tuesday, gold rose $8.30.

On the currency front, the U.S. dollar is trading at 147.52 yen compared to the 147.62 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1606 compared to yesterday's $1.1575.

Asia

Asian stocks rose broadly on Wednesday as Fed rate cut hopes prevailed and U.S. President Donald Trump said the United States was close to a trade deal with China.

The U.S. dollar struggled for direction after a measure of U.S. services sector activity slowed in July due to factors such as tariffs and global trade tensions.

Gold edged lower after four days of gains, while oil prices rose nearly 1 percent following four consecutive retreats.

China's Shanghai Composite Index rose 0.5 percent to 3,633.99 on hopes for Sino-U.S. trade deal. Trump said the U.S. is getting along with China very well and that he would meet his Chinese counterpart, Xi Jinping, before the end of the year if an agreement is struck.

Hong Kong's Hang Seng Index edged up marginally to finish at 24,910.63 ahead of a slew of Chinese economic data and corporate results coming throughout the week.

Japanese markets extended gains from the previous session after a sharp selloff earlier in the week. The Nikkei 225 Index climbed 0.6 percent to 40,794.86, while the broader Topix Index settled 1.0 percent higher at 2,966.57.

Exporters rose, with Sony Group and Toyota Motor both rising around 2 percent. Property developer Mitsui Fudosan soared 5.9 percent after reporting strong quarterly earnings growth.

Mitsubishi Heavy Industries surged 4.8 percent to extend gains from the previous session after Australia accepted the heavy machinery maker's bid for a lucrative and hotly contested contract to build Australia's next-generation warships.

Chip-making equipment maker Tokyo Electron tumbled 3.8 percent after Taiwanese authorities detained three people for allegedly stealing technology trade secrets from Taiwan Semiconductor Manufacturing Co. (TSMC).

Australian markets rose notably to hit a record peak, with banks and miners leading the surge amid expectations of interest-rate cuts by the Reserve Bank of Australia and the U.S. Federal Reserve.

The benchmark S&P/ASX 200 Index advanced 0.8 percent to 8,843.70, while the broader All Ordinaries Index closed up 0.9 percent at 9,111.10.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index ended little changed at 12,880.16 as new data showed the unemployment rate in the country rose to 5.2 percent in the June quarter of 2025, the highest since September 2020.

Europe

European stocks have ticked higher on Wednesday despite weak factory orders data from Germany and fresh tariff threats from U.S. President Donald Trump on pharma and chips.

German new factory orders fell 1.0 percent 1.0 percent month-on-month in June, confounding expectations for an increase of 1.0 percent, according to figures from Destatis. The fall was also sharper than the 0.8 percent decrease posted in May.

While the German DAX Index is up by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.3 percent.

ABN AMRO shares slumped 7.5 percent. The Dutch lender announced a smaller-than-expected share buyback program after reporting weaker lending income in the second quarter.

Miner and trader Glencore tumbled 3.1 percent in London after reporting a 14 percent fall in first half adjusted core profit and scrapping plans to move its primary listing away from London.

Asset management and insurance giant Legal & General fell 2.5 percent despite reporting stronger-than-expected first-half results.

German landlord Vonovia surged 4 percent as it reported 11 percent growth in first-half earnings and raised its EBT guidance for 2025.

Wind turbine maker Nordex Group rallied 2.6 percent as it secured on order for 51.7 MW from TEUT Energieprojekte GmbH in Brandenburg, Germany.

Healthcare group Fresenius added 1.6 percent after posting strong Q2 results and raising its full-year revenue guidance.

Pharmaceutical and agricultural giant Bayer lost 4.2 percent after widening its Q2 loss amid challenging market conditions.

Online retailing giant Zalando plummeted 4.6 percent despite delivering "strong" growth in sales and profits during the second quarter and raising its 2025 guidance.

Lender Commerzbank dropped 1 percent after posting a quarterly profit drop.

U.S. Economic News

The Energy Information Administration is due to release its report on crude oil inventories in the week ended August 1st at 10:30 am ET. Crude oil inventories are expected to dip by 1.1 million barrels after surging by 7.7 million barrels in the previous week.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month's auction of $42 billion worth of ten-year notes.

Federal Reserve Board Governor Lisa Cook and Boston Federal Reserve President Susan Collins are due to participate in a discussion on the U.S. and global economy before "A Central Bank Perspective on the Evolving Global Landscape" event organized by the Federal Reserve Bank of Boston at 2 pm ET.

At 3:10 pm ET, San Francisco Federal Reserve President Mary Daly is scheduled to speak and participate in a moderated conversation before the 2025 Anchorage Economic Summit hosted by the Anchorage Economic Development Corporation.