US stock futures showed a split on Wednesday, with the Dow and S&P 500 supported by hopes for a Middle East agreement, while the Nasdaq faced pressure from post-earnings declines in SpaceX and AMD. At 7:00 am ET, Dow futures added 195 points, S&P 500 contracts gained 0.41%, but Nasdaq 100 futures slipped 0.02%.
The mixed start follows record closes for the Dow and S&P 500 on Tuesday, driven by strong earnings and optimism that Washington and Tehran might reach a deal on shipping through the Strait of Hormuz. However, the diplomatic situation remains fragile, as Iran has disputed claims of direct negotiations and attacks on regional shipping have continued. Oil prices rebounded on Wednesday after a Houthi strike on a Saudi tanker, highlighting that the inflation relief from Tuesday's crude sell-off could be short-lived.
SpaceX and AMD weigh on tech sentiment
SpaceX shares fell about 10% in pre-market trading despite reporting a 92% jump in quarterly revenue to $7.8 billion and a narrowed net loss of $541 million. Starlink and other connectivity operations generated $4.29 billion in revenue, with subscribers doubling year-over-year to 12 million. The concern centers on capital intensity: SpaceX spent $18.37 billion during the quarter, including $15.83 billion on AI infrastructure. Additionally, the start of post-IPO lock-up expiries on Thursday could increase the supply of shares, adding technical risk. Verizon and AT&T also dropped more than 2% after SpaceX outlined ambitions for a broader mobile service, raising competitive concerns for established telecom operators.
AMD reported record second-quarter revenue of $11.54 billion, up 50% year-over-year, with adjusted earnings of $1.66 per share. The company forecast third-quarter sales of $12.7 billion to $13.3 billion, above market expectations. Yet AMD shares fell about 8.1% as investors focused on an adjusted gross-margin forecast of 56%, unchanged from the second quarter despite expected revenue growth. The market now wants proof that AI demand can expand profitability, not just sales. Nvidia gained about 1.9% after SpaceX indicated it would use Nvidia hardware exclusively in its data centers, while Intel and Micron each lost roughly 1.5%.
Key data and Fed speakers on tap
The ADP private-employment report is due at 8:15 am ET, followed by the final S&P Global services PMI at 9:45 am and the ISM services index at 10 am. Employment and prices-paid measures will be closely watched for signs that labor demand and services inflation remain firm. Traders currently assign a 58.4% probability to a quarter-point Federal Reserve rate increase in September. Kansas City Fed President Jeff Schmid said further tightening may be needed to return inflation to 2%, while Governor Lisa Cook and San Francisco Fed President Mary Daly are also scheduled to speak. Strong data could lift Treasury yields and pressure growth stocks, while softer figures would support bonds, though a sharp slowdown could revive concerns about economic momentum.
Earnings wave continues
Disney, Eli Lilly, Uber, CVS, Honeywell, Kraft Heinz, and Shopify are among the companies reporting before the opening bell. Disney's update will test streaming profitability and theme-park demand, while Lilly's results will provide another read on the obesity and diabetes drug market. After the close, attention shifts to SanDisk, Western Digital, and eBay. SanDisk and Western Digital are particularly important for the AI infrastructure trade, as investors have priced in strong storage demand, higher memory prices, and limited supply.
Wall Street's record run faces a broader examination than the mixed futures imply. Diplomacy is supporting the index level, but SpaceX, AMD, jobs data, and another earnings wave will determine whether investors continue rewarding growth or rotate further towards companies with clearer cash returns. For more on the latest market moves, see our coverage of Palantir's earnings impact and oil's slide and earnings optimism.
This article is for informational purposes only and does not constitute financial advice.
