U.S. equity futures are modestly higher as investors balance renewed AI optimism against rising oil prices and another busy earnings calendar. S&P 500 futures were up 0.18%, Dow futures were up 0.20% and Nasdaq 100 futures were up 0.46%. Russell 2000 futures were approximately 0.06% higher, suggesting a positive but still large-cap-led opening setup. Strong guidance from ASML is supporting chip shares, while investors await producer inflation data and additional Federal Reserve testimony.
U.S. equities advanced Tuesday after softer-than-expected inflation data reduced immediate fears of another Fed rate increase. The S&P 500 gained 0.4%, the Nasdaq rose 0.9%, the Russell 2000 advanced 0.4% and the Dow finished fractionally higher. Month-to-date performance now stands at Dow +0.36%, S&P 500 +0.59%, Nasdaq -0.41% and Russell 2000 -1.97%.
The softer June CPI report drove a meaningful decline in short-term yields and the dollar. The 2-year Treasury yield fell 8 basis points to 4.19%, the 10-year declined 3 basis points to 4.59% and the 30-year was unchanged at 5.10%. Headline CPI fell 0.4% month over month, its first decline since the pandemic, while the annual rate slowed to 3.5% from 4.2%. Core inflation was flat for the month, reducing the market-implied probability of a July Fed rate increase to roughly 17% from about 41% before the release.
The DXY fell to 100.92, while the euro rose to $1.1422, sterling strengthened to $1.3389 and the dollar eased to ¥162.22. August WTI crude rose 2.21% to $79.87, extending the oil shock despite the benign backward-looking inflation report. Brent moved above $85 early Wednesday after the U.S. reimposed a naval blockade on Iranian ports and Iran threatened additional export corridors. August gold gained 1.41% to $4,062, although spot prices gave back part of that advance Wednesday morning as oil-driven inflation concerns resurfaced.
Wednesday’s main economic release is the June Producer Price Index at 8:30 a.m. ET, which will test whether the CPI improvement is also visible earlier in the supply chain. Fed Chair Kevin Warsh returns to Congress for Senate testimony at 10:00 a.m. ET, after cautioning Tuesday that one favorable inflation report was not enough to declare victory. The Federal Reserve will release its Beige Book at 2:00 p.m. ET, providing regional updates on growth, employment, pricing and credit conditions.
Sector Highlights
Tuesday’s leadership was concentrated in growth. Technology gained 1.25% and Communication Services rose 1.13%, while Energy added 0.37% despite another increase in crude. The defensive groups lagged, led by Health Care -1.91% and Consumer Staples -1.38%. Real Estate declined 0.42%, Utilities slipped 0.05% and Consumer Discretionary fell 0.03%, while Industrials, Financials and Materials posted only modest gains.
Market internals were healthier than the narrow sector leadership suggested. Advancers led decliners by 1.48:1 on the NYSE and 1.29:1 on the Nasdaq. Total exchange volume reached 11.74B shares on the NYSE and 16.20B shares on the Nasdaq, excluding regional activity.
Information Technology
- ASML Holding (ASML +3.8% premarket) raised its 2026 revenue forecast to €43B–€45B after second-quarter sales and profit exceeded expectations. The company also announced plans to expand manufacturing capacity as AI-driven demand for advanced chipmaking equipment continues to outpace supply.
- IBM (IBM -25.0%) suffered its worst session in decades after warning that weaker software and infrastructure results would significantly reduce second-quarter earnings. The decline erased roughly $69B in market value and offset part of Tuesday’s broader Technology rally.
- Semiconductor and AI infrastructure shares are indicated higher following ASML’s guidance, providing the main support for Nasdaq futures.
Financials
- PayPal (PYPL +18.5% premarket) surged after Stripe and Advent International reportedly offered $60.50 per share, valuing the digital-payments company at more than $53B. PayPal has not responded publicly, and there is no certainty that a transaction will be completed.
- BlackRock (BLK +1.9% premarket) reported higher second-quarter profit as the equity-market rally increased the value of client assets.
- Morgan Stanley (MS +0.6% premarket) is due to report before the opening bell, with investors focused on investment banking, trading revenue and wealth-management flows.
- JPMorgan (JPM) reached a record after reporting record quarterly profit, while Goldman Sachs (GS), Bank of America (BAC) and Citigroup (C) also exceeded consensus profit estimates Tuesday.
Health Care
- Johnson & Johnson (JNJ) reports before the opening bell. Investors will focus on pharmaceutical growth, medical-device demand and management’s full-year outlook after Health Care fell 1.91% Tuesday.
Industrials
- United Airlines (UAL) reports after the close. The market will be watching premium travel demand, pricing and management’s assessment of fuel costs after the recent surge in crude.
Data sourced from FactSet Research Systems Inc.
Disclaimer: This article is for information purposes only and does not constitute investment advice.
