U.S. stock index futures edged higher as investors braced for a fresh wave of corporate earnings as well as producer inflation data due later Wednesday, while PayPal shares surged after reports of a $53 billion takeover offer.
Major U.S. banks kicked off the second-quarter reports season on Tuesday with stronger-than-expected results, buoyed by trading strength and a rebound in dealmaking.
BlackRock reported a jump in second-quarter profit on Wednesday, as a stock market rally boosted the value of client assets. Its shares were 1.9 per cent higher premarket in low volumes.
Investors are now awaiting numbers from Morgan Stanley for further clues on the health of financial firms and capital markets activity. Its shares were up 0.6 per cent.
Meanwhile, PayPal Holdings jumped 18.5 per cent in premarket trading after sources said payments company Stripe and private equity firm Advent International have jointly offered to acquire it for $60.50 per share, valuing PayPal at more than $53 billion.
The earnings season is gathering pace at a crucial point for equities. The S&P 500 has climbed more than 10 per cent this year and, as of Tuesday’s close, stood less than 1 per cent below its record closing high from early June, leaving the rally vulnerable to any disappointment in corporate results.
Investors were also looking ahead to the Producer Price Index (PPI) report for more evidence on inflation trends, after a softer-than-expected Consumer Price Index (CPI) reading on Tuesday eased concerns about an imminent Federal Reserve rate hike.
Markets are currently pricing in about a 17 per cent chance of a quarter-point rate increase at the Fed’s next policy meeting, according to CME’s FedWatch tool. The odds for the same were about 41 per cent before the CPI data.
Wednesday also marks the second day of Federal Reserve Chair Kevin Warsh’s testimony before Congress. Warsh told lawmakers on Tuesday that one data point was not enough to declare victory over inflation.
At 06:09 a.m. ET, Dow E-minis were up 108 points, or 0.2 per cent, and S&P 500 E-minis were up 13.5 points, or 0.18 per cent. Nasdaq 100 E-minis were up 136.75 points, or 0.46 per cent.
Chip stocks were mostly higher, helping lift Nasdaq futures. U.S.-listed shares of ASML rose 3.8 per cent after the Dutch semiconductor equipment maker raised its 2026 financial forecasts, reassuring investors about the strength of AI-driven demand.
On the geopolitical front, Iran’s Islamic Revolutionary Guard Corps threatened to close “all other export corridors that benefit the U.S. and its allies,” Iranian media reported, after Iran shut the Strait of Hormuz and the U.S. reimposed a naval blockade of Iranian ports. (
World shares steadied on Wednesday as upbeat earnings from chipmaking equipment maker ASML and gains in Asian semiconductor stocks recharged the AI trade, offsetting a jump in oil prices on fresh hostilities involving Iran.
The pan-European STOXX 600 index was down 0.05 per cent after rallying the previous day when softer-than-expected U.S. inflation data cooled concerns about higher interest rates, pushing the dollar and yields lower.
Tech-heavy markets in the United States and Asia fared better. South Korea’s volatile KOSPI index jumped 6.2 per cent and Japan’s Nikkei gained 1.5 per cent.
“The divergence between the U.S. and Europe seems to be driven mainly by technology stocks, which are outperforming again,” said Swissquote senior analyst Ipek Ozkardeskaya. “ASML’s results came in sweet.”
The world’s biggest supplier of chipmaking equipment raised its 2026 forecasts and announced plans to expand capacity, as demand linked to artificial intelligence helped the company beat quarterly earnings expectations.
Its shares rose as much as 8 per cent in Amsterdam, helping other AI-related stocks after recent volatility driven by concerns over valuations and AI spending expectations had outpaced fundamentals.
The MSCI World Price Index rose less than 0.1 per cent. On Tuesday, the U.S. headline consumer price index fell 0.4 per cent in June, its first decline since the COVID-19 pandemic, while core inflation for the month was flat.
Bond yields and the dollar fell after the data, leaving the euro above US$1.14 on Wednesday. Two-year Treasury yields edged up 1 basis point to 4.2 per cent on Wednesday but remained roughly 9 basis points below Tuesday’s 17-month high.
“For market bulls this is even better than Goldilocks could have imagined,” J.P. Morgan analysts said in a client note.
“This print should remove any fears over a July rate hike and may assuage fears on September, too. This sets up the market to move higher and to broaden as it does so.”
Further gains were tempered after Federal Reserve Chair Kevin Warsh told Congress that one benign inflation reading was not enough to declare victory over inflation.
Investors will closely watch his testimony later on Wednesday, along with U.S. producer price data and the Fed’s Beige Book, for further clues on the policy outlook.
In Europe, Germany’s 2-year bond yield rose 1 basis point to 2.756 per cent, though it remained below Tuesday’s 2-year high.
Attention will also turn to earnings from Morgan Stanley, BlackRock and Johnson & Johnson before the morning bell, following a strong start to the reporting season from Wall Street banks that buoyed risk sentiment.
Goldman Sachs, JPMorgan and Bank of America all gained after better-than-expected results reinforced hopes that corporate earnings can continue to justify elevated equity valuations despite lingering economic uncertainty.
The Bank of Canada’s policy decision is also due later on Wednesday.
The Canadian dollar was broadly steady at US$1.4051.
Oil extended gains on Wednesday as President Donald Trump reimposed a naval blockade on Iranian ports and Tehran launched strikes on U.S. infrastructure in the region.
Brent futures climbed 0.7 per cent to US$85.31 a barrel. In China, annual economic growth slowed sharply to 4.3 per cent in the second quarter, missing analysts’ expectations as weak domestic demand outweighed stronger production and exports.
A rebound in Chinese retail sales in June, relatively strong nominal GDP and hopes that authorities will respond were the positives for investors.
“I don’t think they will be worried enough to announce any big stimulus, but it is going to be targeted, since they are aware that growth is only for the tech areas whereas the broader economy is continuing to underperform,” said UOB economist Woei Chen Ho.
China’s yuan traded at 6.7715, just below a one-month high. Spot gold was down 0.7 per cent at US$4,023.7 per ounce, paring part of Tuesday’s more than 2 per cent surge as rising oil prices fueled inflation concerns and uncertainty over the U.S. rate outlook.
Reuters