U.S. Stocks May See Early Rally On Upbeat Earnings News

Following the mixed performance seen in the previous session, stocks are likely to move mostly higher in early trading on Wednesday. The major index futures are currently pointing to an early rally on Wall Street, with the S&P 500 futures up by 1.2 percent.

Stocks may benefit from a positive reaction to some of the latest corporate earnings news from companies like Advanced Micro Devices (AMD).

Shares of AMD are surging by 7.9 percent in pre-market trading after the chipmaker reported second quarter results that exceeded analyst estimates on both the top and bottom lines.

Coffee giant Starbucks (SBUX) is also seeing significant pre-market strength after reporting fiscal third quarter earnings in line with estimates and maintaining its full-year guidance.

Shares of DuPont (DD) have also surged in pre-market trading after the chemical giant reported better than expected second quarter results.

On the other hand, shares of Microsoft (MSFT) may move to the downside after the tech giant reported quarterly earnings and revenue that beat expectations but disappointing cloud computing results.

The upward momentum on Wall Street also comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement could have a significant impact on the outlook for the central bank’s next decision in September.

With Fed officials repeatedly saying they need “greater confidence” inflation is slowing before cutting rates, recent inflation data has led to optimism about a September rate cut.

According to CME Group’s FedWatch Tool, there is currently an 87.7 percent chance the Fed will lower rates by a quarter point in September and an 11.9 percent chance of a half point rate cut.

Shortly after the start of trading, MNI Indicators is scheduled to release its report on Chicago-area business activity in the month of July. The Chicago business barometer is expected to dip to 44.5 in July from 47.4 in June, with a reading below 50 indicating contraction.

The National Association of Realtors is alsodue to release its report on pending home sales in the month of June. Pending home sales are expected to jump by 1.3 percent in June after slumping by 2.1 percent in May.

After ending Monday’s choppy trading session narrowly mixed, the major U.S. stock indexes moved in more starkly opposite directions during trading on Tuesday. While the tech-heavy Nasdaq moved sharply lower, the Dow ended the day firmly positive.

The Nasdaq tumbled 222.78 points or 1.3 percent to 17,147.41, ending the session at its lowest closing level in well over a month. The S&P 500 also fell 27.10 points or 0.5 percent to 5,436.44, while the narrower Dow climbed 203.40 points or 0.5 percent to 40,743.33.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Wednesday. Japan’s Nikkei 225 Index jumped by 1.5 percent, while China’s Shanghai Composite Index surged by 2.1 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has climbed by 0.6 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 1.2 percent.

In commodities trading, crude oil futures are spiking $2.52 to $77.25 a barrel after tumbling $1.08 to $74.73 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,466.20, up $14.30 compared to the previous session’s close of $2,451.90. On Tuesday, gold surged $26.40.

On the currency front, the U.S. dollar is trading at 150.14 yen compared to the 152.77 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0837 compared to yesterday’s $1.0815.

Business News