Global stock futures showed modest movements Wednesday, following a monumental Tuesday rally that propelled the S&P 500 and Dow Jones to fresh record highs. This surge was fueled by robust corporate earnings and optimism surrounding a potential U.S.-Iran deal to reopen the Strait of Hormuz. Investors are now keenly watching upcoming earnings reports from major companies like Disney and Uber, alongside critical economic data including the ADP private payrolls report.
Global stock futures opened with modest gains Wednesday, following a historic Tuesday session where major indexes, including the broad S&P 500, surged to unprecedented record highs. This powerful rally was ignited by a combination of robust corporate earnings reports and positive diplomatic signals regarding the reopening of the crucial Strait of Hormuz.
As of early Wednesday, Dow futures climbed 195 points (0.36%), S&P 500 futures added 0.33%, and Nasdaq-100 futures advanced 0.13%, indicating a cautious continuation of the positive momentum.
The previous day's market euphoria saw the S&P 500 jump 1.8% to close above 7,700 for the very first time, while the Dow gained over 900 points, also securing a record close. This surge was primarily attributed to strong earnings performances and Treasury Secretary Scott Bessent's comments suggesting the U.S. and Iran were nearing a deal to ensure freedom of movement through the Strait of Hormuz, easing geopolitical fears and impacting oil prices.
In Asian trading, South Korea's Kospi led gains, surging over 4%, with the small-cap Kosdaq advancing 2%. Japan's Nikkei 225 rose 3.1%, and the Topix added 1.57%. Australia's S&P/ASX 200 also hit an intraday record, closing 0.13% higher. Conversely, Hong Kong's Hang Seng Index slid 0.4%, and mainland China's CSI 300 remained largely unchanged.
Asian technology stocks, in particular, rode the Wall Street AI rally. SoftBank Group soared more than 10%, chip equipment maker Tokyo Electron added 3.64%, and Advantest jumped 7%. Japanese memory chipmaker Kioxia rose 6.34%. In South Korea, SK Hynix jumped 6.9%, Samsung Electronics gained over 4%, and Seoul Semiconductor popped 7.6%.
Meanwhile, in after-hours U.S. trading, SpaceX shares declined almost 7% after its inaugural earnings report revealed capital expenditures climbed to $18.4 billion in the second quarter, significantly exceeding analyst projections. Chip giant AMD also dropped 8% despite adjusted earnings marginally beating Street estimates. On a brighter note, Arista Networks shares surged about 10% after its second-quarter results comfortably surpassed expectations.
Gold prices edged higher for a third consecutive session, with spot gold rising 1.4% to $4,152.36 an ounce and gold futures gaining 1.1% to $4,200.20, buoyed by softer oil prices. Oil itself continued to slide, with West Texas Intermediate crude futures dropping 1% to $74.97 per barrel, and Brent crude futures losing 0.8% to $78.77 a barrel, as diplomatic efforts to resolve U.S.-Iran tensions intensified.
European markets also saw strength, with the Stoxx 600 hitting a record high on Tuesday, closing 0.7% up, with the rally anticipated to persist. The underlying sectoral performance in Europe has been varied, with technology and banks performing well, while luxury stocks and automakers faced challenges.
Other significant company news included Samsung Electro-Mechanics and LG Innotek, whose shares surged 12% and 15% respectively in South Korea, following reports of securing exclusive deals to supply camera modules for Tesla's upcoming Cybercab robotaxi. Conversely, shares of Chinese optical transceiver manufacturers Zhongji Innolight and Eoptolink Technology fell after reports indicated the Trump administration was drafting measures to ban imports of new Chinese data center devices, targeting China's AI development efforts.
The Japanese yen strengthened 0.19% against the dollar, reaching 157.41, as investors closely monitored signals for further currency intervention from Japanese and U.S. authorities.
Looking ahead, major U.S. companies slated to report earnings on Wednesday include entertainment heavyweight Disney, ride-sharing giant Uber, and pharmaceutical firm Eli Lilly in the morning. E.l.f Beauty and DoorDash will share their quarterly reports in the afternoon. On the economic front, traders await ADP's private payrolls report for July, with a consensus estimate of 75,000 jobs added, along with the S&P Global Services PMI and ISM non-manufacturing readings for July.
According to Alicia Levine, chief investment officer at BNY Wealth, "The only thing that really mattered was the question on ROI driving earnings higher and the question of whether or not earnings are in a bubble – and the answer is no."
