Upbeat Earnings News May Lead To Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to add to the gains posted in the previous session.

Early buying interest is likely to be generated in reaction to upbeat earnings news from big name companies such as Netflix (NFLX), Procter & Gamble (PG) and Travelers (TRV).

Shares of Netflix are surging by 14.6 percent in pre-market trading after the streaming giant reported fourth quarter results that exceeded analyst estimates on both the top and bottom lines. The company also said it is raising prices after a jump in subscribers during the quarter.

Consumer goods giant Procter & Gamble is also seeing notable pre-market strength after reporting better than expected fiscal second quarter results.

Shares of Travelers are also jumping by 5.8 percent in pre-market trading after the insurance giant reported fourth quarter results well above analyst estimates.

On the other hand, shares of Johnson & Johnson (JNJ) may move to the downside after the drug giant reported better than expected fourth quarter results but provided disappointing sales guidance for 2025.

After a positive start, U.S. stocks largely kept moving higher on Tuesday, and the major averages all ended the day’s session on a firm note. A drop in bond yields and optimism about a few interest rate cuts this year contributed to the positive sentiment in the market.

The Dow closed up 537.98 points or 1.2 percent, at 44,025.81. The S&P 500 ended higher by 52.58 points or 0.9 percent, at 6,049.24, while the Nasdaq settled at 19,756.78, gaining 126.58 points or 0.6 percent.

Investors picked up stocks as worries about tariffs eased a bit as Donald Trump, who signed a slew of executive orders on Monday soon after being sworn in as the 47th President of United States, refrained from signaling trade barriers against China. He threatened to impose tariffs of up to 25 percent on Mexico and Canada but did not enact a policy.

Oracle surged nearly 7.5 percent, buoyed by reports that Trump will announce private sector investment of up to $500 billion to fund artificial intelligence infrastructure.

Charles Schwab climbed nearly 6 percent on strong earnings news. 3M moved up sharply, buoyed by stronger than expected quarterly earnings.

General Motors, Moderna, Dollar General, Micron Technology, Southwest Airlines, Alaska Air, Delta Airlines, Caterpillar, Nike, Starbucks and United Airlines Holdings gained 3 to 5 percent.

Nvidia, Boeing, Amazon, Target, Eli Lilly, US Bancorp, American Express and Netflix were among the other notable gainers in the session.

Walgreens Boots Alliance tanked nearly 10 percent, weighed down by the Department of Justice’s lawsuit against the company. The company, which made a multibillion-dollar settlement over opioid prescriptions two years ago, now faces a suit that alleges it dispensed “millions of unlawful prescriptions.”

Apple Inc. shares declined sharply following a series of downgrades due to weak iPhone sales and somewhat disappointing performance in hardware and services segments.

Chevron, Merck, Lennar and Booking Holdings were some of the other notable losers.

Commodity, Currency Markets

Crude oil futures are slipping $0.16 to $75.67 a barrel after tumbling $1.56 to $75.83 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,763.50, up $4.30 compared to the previous session’s close of $2,759.20. On Tuesday, gold rose $10.50.

On the currency front, the U.S. dollar is trading at 155.92 yen compared to the 156.30 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0428 compared to yesterday’s $1.0428.

Asia

Asian stocks ended mixed on Wednesday, with Chinese and Hong Kong markets falling sharply after U.S. President Donald Trump threatened tariffs on the EU and China to address trade imbalances and combat fentanyl trafficking.

Speaking to reporters at the White House, Trump reiterated his administration’s plans to discuss a potential 10 percent tariff on goods imported from China starting February 1 to curb the flow of deadly drug fentanyl that is being sent from China to the U.S. via Mexico and Canada.

Meanwhile, Europe will respond to any tariffs imposed by President Donald Trump in a proportionate way, the European Union’s commissioner for the economy told CNBC after Trump repeated his threat to impose tariffs on EU goods entering the United States.

The dollar held ground in Asian trading amid uncertainty about Trump’s tariff plans. Gold held at two-month highs above $2,750 per ounce while oil extended declines on concerns of higher U.S. output in a market widely expected to be oversupplied this year.

China’s Shanghai Composite Index fell 0.9 percent to 3,213.62 on signs of rising tensions between the world’s largest economies.

Hong Kong’s Hang Seng Index plummeted 1.6 percent to 19,778.77, snapping a six-day winning streak on broad losses among technology companies as Trump announced a major private-sector investment aiming to “beat China” in AI.

Japanese markets rallied as Trump announced a major $500 billion AI infrastructure project in collaboration led by SoftBank, Oracle, and OpenAI. The Nikkei 225 Index jumped 1.6 percent to 39,646.25, while the broader Topix Index settled 0.9 percent higher at 2,737.19.

SoftBank Group Corp shares surged 10.6 percent, while Advantest climbed 4 percent and Tokyo Electron advanced 1.7 percent.

The yen slipped from a five-week high touched on Tuesday after media reports suggested the Bank of Japan remains on track to raise interest rates on Friday.

Seoul stocks hit over two-month highs on optimism about the improved outlook for the region’s tech firms. Samsung Electronics gained 1.5 percent and SK Hynix surged 3.4, percent while the Kospi closed 1.2 percent higher at 2,547.06.

Australian markets eked out modest gains to end higher for a third straight session, with technology and uranium stocks leading the surge.

The benchmark S&P/ASX 200 Index rose 0.3 percent to 8,429.80, while the broader All Ordinaries Index settled 0.3 percent higher at 8,680.50.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.1 percent to 13,037.14 after data showed annual inflation remained above the midpoint of the central bank’s target band in the final three months of last year.

Europe

European stocks have moved mostly higher on Wednesday despite U.S. President Donald Trump repeating his threat to impose tariffs on EU goods entering the United States.

“If there is a need to defend our economic interests we will respond in a proportionate way,” the European Union’s commissioner for the economy, Valdis Dombrovskis said in an interview with CNBC at the World Economic Forum in Davos, Switzerland.

Rate cut optimism prevailed after ECB policymaker Klaas Knot backed the idea of near-term cuts in an interview earlier today.

The Dutch central banker told Bloomberg TV’s Francine Lacqua in an interview in Davos, Switzerland, that investor bets for interest rate cuts in January and March are reasonable, but any commitment beyond is difficult due to heightened global uncertainty.

The European Central Bank is all but certain to reduce interest rates by 25 basis points next week to support regional growth.

While the U.K.’s FTSE 100 Index is up by 0.2 percent, the French CAC 40 Index is up by 1.1 percent and the German DAX Index is up by 1.3 percent.

Adidas shares surged 6.5 percent after the German sportswear brand posted better-than-expected fourth-quarter results.

easyJet fell nearly 3 percent after the low-cost airline posted a reduced operating loss in the first quarter.

German car-parts supplier Schaeffler plunged 13 percent after warning that its profitability fell short of its guidance and consensus expectations last year.

Chocolate maker and cocoa processor Barry Callebaut lost 5 percent after lowering its sales-volume guidance.

On a light day on the economic front, the U.K. budget deficit more than doubled in December from last year as increases in spending were much larger than increases in receipts, the Office for National Statistics said.

Public sector net borrowing increased GBP 10.1 billion from the last year to GBP 17.8 billion in December. This was the highest December borrowing for four years and also above GBP 14.6 billion forecast by the Office for Budget Responsibility.

U.S. Economic News

The Conference Board is due to release its report on leading economic indicators in the month of December at 10 am ET. The leading economic index is expected to edge down by 0.1 percent in December after rising by 0.3 percent in November.

A 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $13 billion worth of twenty-year bonds.