Futures Pointing To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to initial strength on Wall Street on Wednesday, with stocks likely to see further upside after ending the previous session mostly higher.

The futures ticked higher following the release of a report from the Labor Department showing producer prices fell by more than expected in the month of June.

The Labor Department said its producer price index for final demand fell by 0.3 percent in June after climbing by a downwardly revised 0.6 percent in May.

Economists had expected producer prices to edge down by 0.1 percent compared to the 1.1 percent jump originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 5.5 percent in June from a downwardly revised 6.0 percent in May.

Economists had expected the annual rate of producer price growth to slow to 6.2 percent from the 6.5 percent originally reported for the previous month.

Following yesterday’s weaker-than-expected consumer price inflation data, the report is likely to further ease concerns about the outlook for inflation and interest rates.

Buying interest may be somewhat subdued, however, as the price of crude oil sees further upside amid the escalating conflict between the U.S. and Iran.

In an interview with Fox News, President Donald Trump threatened to attack Iran’s power plants and bridges next week “unless they get to the table and negotiate.”

Following the weakness seen in Monday’s session, stocks moved back to the upside during trading on Tuesday. The major averages all finished the day in positive territory, with the tech-heavy Nasdaq posting a standout gain.

The Nasdaq ended the day off its highs of the session but still closed up 233.83 points or 0.9 percent at 26,107.01. The S&P 500 also climbed 28.25 points or 0.4 percent to 7,543.59, while the narrower posted a more modest gain, inching up 9.63 points or less than a tenth of a percent to 52,508.27.

The strength on Wall Street came following the release of a closely watched Labor Department report showing consumer prices in the U.S. decreased by much more than expected in the month of June.

The Labor Department said its consumer price index fell by 0.4 percent in June after climbing by 0.5 percent in May. Economists had expected consumer prices to edge down by 0.1 percent.

The report also said the annual rate of consumer price growth slowed to 3.5 percent in June from 4.2 percent in May, coming in below economist estimates for a 3.8 percent jump.

Meanwhile, the Labor Department said core consumer prices, which exclude food and energy prices, came in unchanged in June after rising by 0.2 percent in May. Economists had expected core prices to increase by another 0.2 percent.

The annual rate of growth by core consumer prices slowed to 2.6 percent in June from 2.9 percent in May, while economists had expected the pace of growth to slip to 2.8 percent.

The weaker-than-expected inflation data helped ease recent concerns about the outlook for inflation and the possibility of higher interest rates.

“Today’s better than expected core reading gives the Fed breathing room in deciding whether and when to raise interest rates,” said Nationwide Chief Economist Kathy Bostjancic.

She added, “That all said, the renewed escalation of conflict in the Middle East and announced reimposition of a U.S. blockage has prompted a sharp reversal in oil and gasoline prices that introduces upside risk to our forecast.”

However, a steep drop by shares of IBM Corp. (IBM) limited the upside for the Dow, with the tech giant plummeting by 25.2 percent.

The nosedive by IBM came after the company reported preliminary second-quarter results that fell short of expectations.

Computer hardware stocks saw a substantial rebound after falling sharply on Monday, resulting in a 2.7 percent surge by the NYSE Arca Computer Hardware Index.

A significant rebound was also seen by semiconductor stocks, as reflected by the 2.5 percent jump by the Philadelphia Semiconductor Index.

Steel, gold and networking stocks also turned in strong performances on the day, while pharmaceutical, healthcare and airline stocks showed notable moves to the downside.

Commodity, Currency Markets

Crude oil futures are rising $0.53 to $79.87 a barrel after jumping $1.20 to $79.34 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,070.40, up $0.70 compared to the previous session’s close of $4,069.70. On Tuesday, gold climbed $64.

On the currency front, the U.S. dollar is trading at 162.18 yen compared to the 162.23 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1426 compared to yesterday’s $1.1419.

Asia

Asian stocks rose broadly on Wednesday as a softer-than-expected U.S. inflation print helped reduce concerns of a possible interest-rate hike by the Federal Reserve in the near term.

That said, overall gains were limited after the release of weak Chinese GDP data and amid growing concerns that the United States and Iran may return to an all-out war.

After announcing a reversal of plans to charge a 20 percent toll on cargo passing through the Strait of Hormuz, U.S. President Donald Trump said he would authorize the bombing of Iran’s energy infrastructure next week if Iran doesn’t come to the table.

The dollar extended losses in Asian trading, while gold prices slipped to $4,023 an ounce on concerns over rising oil prices amid escalating Middle East tensions.

Brent crude futures traded up nearly 2 percent above $86 a barrel, extending gains for a third consecutive session on fears of prolonged disruptions to energy supplies.

China’s Shanghai Composite Index dipped 0.3 percent to 3,955.58 after China’s GDP growth came in at 4.3 percent in the second quarter, the weakest pace since late 2022 and missing market projections.

However, separate industrial output and retail sales data released alongside the GDP figures showed some signs of improvement in consumer activity in June.

Hong Kong’s Hang Seng Index jumped 1.4 percent to 24,681.10, with healthcare and biotech stocks leading the surge.

Japanese markets rose sharply to extend gains for a second consecutive session, driven by short covering in semiconductor-related stocks.

The Nikkei 225 Index surged 1.5 percent to 68,751.51, while the broader Topix Index closed up 1.2 percent at 4,088.12.

Advantest rallied 5.8 percent and Tokyo Electron advanced 4.4 percent ahead of earnings reports from ASML and TSMC.

Seoul stocks rallied the most in nearly five weeks as semiconductor stocks rebounded from a recent sell-off. The Kospi Index spiked 6.2 percent to 7,284.41.

Market bellwether Samsung Electronics climbed 6.3 percent after upbeat analyst views on the outlook for AI memory demand.

Leading AI memory chipmaker SK Hynix soared 8.8 percent and chip equipment maker Hanmi Semiconductor skyrocketed nearly 30 percent.

Australian markets eked out modest gains as a weaker dollar lifted base metals prices and drove a sharp rebound in mining stocks.

The benchmark S&P/ASX 200 Index rose 0.4 percent to 8,841.10, while the broader All Ordinaries Index settled 0.4 percent higher at 9,034.60. BHP Group shares surged 3.2 percent while Rio Tinto added 1.1 percent.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index slipped 0.1 percent to 13,635.07, giving up early gains and extending losses for a third consecutive session.

Europe

European stocks are subdued on Wednesday as escalating Middle East tensions overshadowed upbeat earnings results from the likes of ASML Holding and Richemont.

Eurozone bond yields held near multi-year highs amid growing concerns that the United States and Iran may return to an all-out war.

While the German DAX Index is down by 0.6 percent, the U.K.’s FTSE 100 Index is down by 0.1 percent and the French CAC 40 Index is just below the unchanged line.

ASML Holding has surged. The Dutch chip equipment supplier lifted its annual sales forecast for the second time this year due to surging AI spending.

Dr. Martens shares has also jumped after the British bootmaker backed its annual outlook, heading into its annual general meeting in London.

Hunting, a precision engineering group, has also spiked after reporting solid first-half trading and reaffirming its 2026 targets.

Norway’s Aker BP has also moved notably higher after posting impressive second-quarter results.

Swiss luxury group Richemont has also soared after reporting better-than-expected sales for its most recent quarter, helped by booming demand for its jewelry business.

Meanwhile, discount retailer B&M European Value Retail has plunged after reporting modest sales growth in the first quarter.

Miner Antofagasta has also moved to the downisde after its copper output fell 9.5 percent in the first half.

Delivery Hero has also dropped. The German food-delivery company confirmed that it was in advanced negotiations with Uber Technologies regarding a potential takeover offer.

U.S. Economic News

Producer prices in the U.S. decreased by more than expected in the month of June, according to a report released by the Labor Department on Wednesday.

The Labor Department said its producer price index for final demand fell by 0.3 percent in June after climbing by a downwardly revised 0.6 percent in May.

Economists had expected producer prices to edge down by 0.1 percent compared to the 1.1 percent jump originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 5.5 percent in June from a downwardly revised 6.0 percent in May.

Economists had expected the annual rate of producer price growth to slow to 6.2 percent from the 6.5 percent originally reported for the previous month.

A separate report released by the Federal Reserve Bank of New York on Wednesday showed regional manufacturing activity has picked up considerably in the month of July.

The New York Fed said its general business conditions index jumped to 15.6 in July from 5.7 in June, with a positive reading indicating growth. Economists had expected the index to climb to 8.6.

Looking ahead, the New York Fed firms remained fairly optimistic conditions would improve in the months ahead, although the index for future business conditions dipped to 27.9 in July from 30.1 in June.

At 10 am ET, Federal Reserve Chairman Kevin Warsh is scheduled to testify before the Senate Banking Committee

The Energy Information Administration is due to release its crude oil inventories in the week ended July 10th at 10:30 am ET. Crude oil inventories are expected to decrease by 2.6 million barrels.

At 1 pm ET, Federal Reserve Governor Lisa Cook is scheduled to speak on the economic outlook before an Exchequer Club luncheon.

The Federal Reserve is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts at 2 pm ET.

At 6:30 pm ET, St. Louis Federal Reserve President Alberto Musalem is scheduled to deliver welcome remarks before a Homer Jones Memorial Lecture event.