U.S. Stocks May See Further Upside In Early Trading

The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks poised to add to the strong gains posted over the past several sessions.

The markets may continue to benefit from recent upward momentum, which has propelled the Dow and S&P 500 to new record highs.

Buying interest has recently been generated in reaction to a sharp decline by the price of crude oil, which plunged by more than 10 percent over the two previous sessions.

While crude oil prices are regaining some ground during today’s trading, traders remain optimistic about an agreement to once again reopen the Strait of Hormuz.

The Dow may benefit from a sharp increase by shares of Disney (DIS), with the entertainment giant surging by more than 3 percent in pre-market trading after reporting better than expected fiscal third quarter earnings.

Extending the strong upward move seen over the past few sessions, stocks moved sharply higher during trading on Tuesday. The major averages all showed significant moves to the upside, with the Dow and S&P 500 reaching new record closing highs.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow rallied 907.47 points or 1.7 percent to 54,085.88, the NASDAQ soared 671.10 points or 2.6 percent to 26,584.99 and the S&P 500 jumped 136.02 points or 1.8 percent to 7,736.52.

The continued strength on Wall Street came amid an extended nosedive by the price of crude oil, with U.S. crude oil futures plunging by 5.7 percent and plummeting by more than 5 percent on Monday.

Crude oil prices had moved higher earlier in the day but reversed course after Treasury Secretary Scott Bessent claimed the U.S. and Iran could reach a deal to reopen the Strait of Hormuz within the next couple days.

“We are in talks with the Iranians,” Bessent told CNBC’s “Squawk Box.” “There is a chance we may have a deal today or tomorrow to open the strait and move towards a more normalized position in this conflict.”

Tech stocks helped lead the rally amid a positive reaction to earnings news from enterprise software giant Palantir (PLTR).

Shares of Palantir soared by nearly 30 percent after the company reported better than expected second quarter results and raised its full-year guidance.

Commodity, Currency Markets

Crude oil futures are climbing $0.56 to $76.33 a barrel after plummeting $4.57 to $75.77 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $4,256.60, up $104 compared to the previous session’s close of $4,152.60. On Tuesday, gold jumped $62.10.

On the currency front, the U.S. dollar is trading at 157.58 yen compared to the 157.72 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is valued at $1.1548 compared to yesterday’s $1.1529.

Asia

Asian stocks followed Wall Street higher on Wednesday, with tech stocks leading the surge after American data analytics company Palantir reported robust second-quarter results and raised its full-year revenue forecast.

AMD and SpaceX also reported strong growth figures, but their shares fell in after-hours trading following a recent runup.

Brent crude futures traded above $80 a barrel after two days of losses amid rising optimism over a potential interim agreement to reopen the Strait of Hormuz.

Media reports suggested that Iran is considering allowing European countries to help clear mines from the strategic waterway, marking a significant shift in Tehran’s position.

Iranian Foreign Ministry spokesman Esmaeil Baqaei said that talks with Oman on securing safe shipping routes continue “positively.”

The U.S. dollar hovered near a six-week low in Asian trading, while gold jumped more than 2 percent to trade at $4,163 an ounce as traders scaled back their expectations for a September interest rate hike by the U.S. Federal Reserve.

During a speech on Tuesday, Fed Bank of Kansas City President Jeff Schmid said that current inflation remains “too high” and there is a need for tighter policy to ensure price increases decline to the central bank’s 2 percent target.

China’s Shanghai Composite Index jumped 1.5 percent to 3,878.43 despite reports of a potential U.S. import ban on new models of Chinese data center components. Hong Kong’s Hang Seng Index edged up by 0.2 percent to 25,915.82.

Japanese markets closed at a two-week high as AI-related stocks tracked their U.S. peers higher. The Nikkei 225 Index surged 3.7 percent to 66,300.44, while the broader Topix Index settled 2.1 percent higher at 4,046.17.

Among the prominent gainers, memory chip maker Kioxia Holdings spiked 4.2 percent and semiconductor-making equipment producer Advantest soared 8.8 percent.

The yen held around the 157 level after U.S. Treasury Secretary Scott Bessent said he was sure Bank of Japan Governor Kazuo Ueda will “do what is best” for the country’s economy,

Seoul stocks surged amid easing concerns over the profitability of artificial intelligence (AI) investments and Hormuz reopening hopes.

The Kospi Index jumped 3.8 percent to 6,598.26. Samsung Electronics rallied 2.5 percent after the company announced its next-generation memory technology. Its chipmaking rival SK Hynix soared 5.8 percent and automaker Hyundai Motor added 3.1 percent.

Australian markets hit a record high as miners surged on a weaker dollar on hopes for a diplomatic resolution to the Iran war. Resilient household spending data also boosted sentiment.

The benchmark S&P/ASX 200 Index climbed 0.9 percent to 9,227.80, while the broader All Ordinaries Index closed 1 percent higher at 9,405.40.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.7 percent to 13,997.18 after the release of mixed employment data showing strong hiring and faster wage growth, while the jobless rate hit a decade peak of 5.6 percent in the June quarter.

Europe

European stocks have moved modestly higher on Wednesday after surging to record highs the previous day, driven by positive corporate earnings and hopes for progress in talks between Washington and Tehran to reopen the Strait of Hormuz.

The U.K.’s FTSE 100 Index is up by 0.5 percent, the German DAX Index is up by 0.2 percent and the French CAC 40 Index is up by 0.1 percent.

In corporate news, British brickmaker Ibstock fell 2.4 percent after reporting lower first-half revenue and guiding to the low end of its 2026 profit range.

Commodity trader Glencore surged 3.3 percent after reporting a sharp rise in first-half earnings on the back of higher commodity prices.

Fashion and homeware retailer Next gained 6.5 percent after raising its outlook for the third time this fiscal year.

Switzerland-based bottler Coca-Cola HBC surged 4 percent after lifting its full-year profit forecast.

Generics maker Sandoz soared nearly 8 percent after reporting a better-than-expected 9 percent rise in Q2 net sales.

Novo Nordisk tumbled 3.7 percent. The Danish drugmaker said an experimental medicine didn’t reduce risk of heart attack or stroke in a late-stage clinical trial.

Schaeffler rose 1.3 percent. After reporting Q2 profit in line with expectations, the German industrial and automotive supplier announced plans to cut its German workforce through an expanded phased-retirement program.

Chip maker Infineon Technologies slumped almost 6 percent despite the company reporting record quarterly revenue and raising its full-year revenue and adjusted free cash flow forecasts.

Siemens Energy rose 1.2 percent. The energy technology company said sales, margins and orders hit a record in the third quarter.

Dutch brewer Heineken advanced 2.5 percent after reporting a forecast-beating first-half profit and backing its full-year earnings outlook.

U.S. Economic News

Payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. increased by less than expected in the month of July.

The report said private sector employment rose by 44,000 jobs in July after climbing by a downwardly revised 95,000 jobs in June.

Economists had expected private sector employment to grow by 75,000 jobs compared to the addition of 98,000 jobs originally reported for the previous month.

ADP said sector-level hiring was choppy last month but pay sent a clear signal, with year-over-year pay for job-changers accelerating to its fastest pace of growth in nearly a year.

At 10 am ET, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of July. The services PMI is expected to inch up to 54.5 in July from 54.0 in June, with a reading above 50 indicating growth.

The Energy Information Administration is due to release its crude oil inventories in the week ended July 31st at 10:30 am ET. Crude oil inventories are expected to decrease by 1.5 million barrels.

At 11 am ET, the Treasury Department is scheduled to announce the details of this month’s auction of three-year and ten-year notes and thirty-year bonds.

Federal Reserve Governor Lisa Cook is due to speak on the economic outlook before the Anchorage Economic Development Corporation 2026 Economic Luncheon at 4:05 pm ET.

At 8:35 pm ET, San Francisco Federal Reserve President Mary Daly is scheduled to deliver the keynote before the Economic and Social Research Institute (ESRI) International Conference.