U.S. stock futures rallied on Wednesday morning after a massive market surge that ended with major benchmarks like the S&P 500 finishing off the day at all-time highs.
Futures for the Dow rose by 195 points, or 0.36%. The S&P 500 futures were 0.33% higher. Nasdaq-100 futures
were up 0.13%.
Over in Asia, South Korea’s Kospi was the best-performing market, gaining more than 4% while the small cap Kosdaq was up 2%. In Japan, the Nikkei 225 gained 3.1% and the Topix 1.57%. Australia’s S&P/ASX 200 index
was 0.13% higher.
SpaceX fell nearly 7% following remarks by the company’s founder, Elon Musk, that capital spending was up by 18.4 billion dollars in the quarter. In AMD, the semiconductor maker fell 8% following the reporting of adjusted earnings which were just marginally above the market expectations.
Markets surged on Tuesday following positive remarks made by the Secretary of the Treasury, Scott Bessent, that there is hope for a possible deal between the US and Iran that will open the Strait of Hormuz. S&P 500 index closed above 7,700 for the first time, with gains of 1.8%, while the Dow rose by more than 900 points.
The price of oil dropped, with West Texas Intermediate crude futures falling by 5.7% to close at $75.77 per barrel.
Also, Caterpillar , whose earnings were announced on Tuesday and who had a blockbuster quarter because of the continuing AI buildout, also propelled the market higher. The stock climbed above 5%. Palantir Technologies
jumped nearly 30% after reporting quarterly results that CEO Alex Karp called “otherworldly.”
“The bottom line is all about the question of how the ROI can drive higher earnings and the question of whether or not earnings are in a bubble, and the answer is no,” according to Alicia Levine, chief investment officer at BNY Wealth, in a CNBC report.
On Wednesday morning, entertainment powerhouse Disney is expected to release its earnings report. Reports from ride-hailing behemoth Uber and pharmaceutical company Eli Lilly are also scheduled for release. E.l.f. Beauty and DoorDash will release their quarterly earnings in the afternoon.
Economically speaking, ADP’s private payrolls data for July is set to be released on Wednesday, and according to the Dow Jones consensus estimate, private employment is expected to increase by 75,000. The July S&P Global Services Purchasing Managers’ Index (PMI) and ISM non-manufacturing figures are expected as well.
Gold up for third consecutive day amid weaker oil prices
Gold continued its upward march into the third consecutive day, thanks to weak crude oil prices and a weakened dollar making it more attractive.
Gold was up 1.4% at about $4,152.36 per ounce, with gold futures up 1.1% to $4,200.20.
Gold is continuing its inverse relationship with oil, as oil slumped by more than 5% yesterday following comments from US Treasury Secretary Scott Bessent to CNBC suggesting that an agreement had been reached to open up the Strait of Hormuz.
The price action in gold has remained closely correlated with other risk assets since the outbreak of war, with risk assets having had a good day and with the S&P 500 topping out at 7,700.
Crude prices tumble on signal from Bessent that Hormuz deal nears completion
Crude oil prices fell by over 1% on Wednesday, with analysts evaluating diplomatic moves aimed at resolving the tension between Iran and the United States.
The futures for West Texas Intermediate crude oil delivery for September dipped by roughly 1%, selling at $74.97 per barrel. Futures for Brent crude oil for October delivery fell by 0.8%, selling at $78.77 a barrel.
US officials reported on Tuesday that civilian ships continue to use the Strait of Hormuz in safety after US Treasury secretary, Scott Bessent, hinted that a solution involving Iran to open up the strategically significant route would be reached within days.
According to a message on X by the US Central Command, the “southern corridor of the Strait of Hormuz continues to remain free and open,” noting that US military personnel had been instrumental in escorting over 1,000 civilian ships using the route amid unwarranted Iranian aggression.
The southern shipping corridor runs within Omani territorial waters, far from the part of the strait near Iran.
Zhongji Innolight and Eoptolink stocks down due to alleged efforts against U.S. import ban
Shares of Zhongji Innolight fell about 5%, while Eoptolink Technology tumbled by 5.7% following a report from Reuters that the Trump government was working on regulations that would prohibit imports of new Chinese-made optical transceivers in a bid to restrict AI innovation in China.
According to its prospectus, Zhongji Innolight, which made its debut on the Hong Kong stock exchange last week, claims it is the largest producer of optical interconnect products in the world and forms part of the AI system by income.
Eoptolink produces optical modules that operate in the broadband network and data center sectors.
As investors keep an eye on possible intervention moves, the yen is strengthening
The Japanese yen appreciated by 0.19% to 157.41 versus the dollar on Wednesday.
The focus is now on whether both the Japanese and the U.S. authorities would continue with their currency activities following the initial wave of intervention, according to Vincent Chung, co-portfolio manager of the diversified income bond strategy at T. Rowe Price.
“Already, the yen has recovered quite a significant amount of underperformance versus other currencies from Asia, such as the Korean won. With continued intervention, the yen could strengthen even more against the dollar,” Chung commented in a note on Wednesday.
Extended intervention could lead to further appreciation of the yen despite doubts that intervention would lead to a sustained recovery, Chung said.
Japan’s SoftBank rises 10% on follow-up to US AI stock surge
Technology shares from Asia were soaring on Wednesday following a bullish performance on the Wall Street on Tuesday as strong corporate results coupled with a decline in oil prices drove major U.S. indices to new highs.
The shares of SoftBank Group soared more than 10% while those of Tokyo Electron soared by 3.64%. Advantest climbed 7% while Japanese memory chipmaker Kioxia gained 6.34%.
In South Korea, SK Hynix soared 6.9% while Samsung Electronics gained more than 4%. Seoul Semiconductor rose 7.6%.
There have been sharp swings in the prices of technology shares recently especially in South Korea where semiconductor companies dominate.
Australian stocks reach all-time highs as mining giants surge
Australia’s key index S&P/ASX 200 was up 0.67% at an all-time intra-day high, according to LSEG data.
BHP Group, which is an iron ore major and one of the biggest constituents of the index, gained 2.3%, while its competitor, Rio Tinto, was up 1.68%. Fortescue, an iron ore producer, gained
Shares of Samsung Electro-Mechanics, LG Innotek Rise After Tesla Camera Module Supply Report
The stock prices of Samsung Electro-Mechanics rose by 12%, and LG Innotek gained 15% on Wednesday morning following reports that the firms have won exclusive deals to provide camera modules for Tesla’s robotaxi called Cybercab.
According to Hankyung, Samsung Electro-Mechanics started mass production of the camera modules last month, whereas LG Innotek will start manufacturing the same at the end of this year, as per industry sources.
Korea’s shares rose across the board with the Kospi Index gaining nearly 5%.
Kospi gains 4% after opening on positive note in Asian market
Asian and Pacific indices opened in positive territory on Tuesday. South Korea is leading the way up, with the Kospi index rising by more than 4%. The Kosdaq index gained 1.6%.
In Japan, the Nikkei 225 rose 1.83%, and the Topix added 0.9%.
The benchmark S&P/ASX 200 index in Australia gained 0.
Chicago Nikkei 225 futures gain amid strong U.S. market performance overnight
Asian equity futures markets point to a higher opening Wednesday following a positive overnight session on Wall Street due to the positive prospects surrounding the US-Iran agreement.
US Treasury Secretary Scott Bessent noted that it may be possible for Washington and Tehran to come to an agreement on Tuesday or Wednesday to restore access through the Strait of Hormuz.
The US military Central Command announced that the southern passage through the Strait of Hormuz is still “open and free” for commercial traffic despite “unwarranted Iranian aggression.”
Futures of the Nikkei 225 in Chicago increased by 0.25%, while the Osaka contract was up about 2.5% from its last close at 63,957.53.
Australia’s S&P/ASX 200 futures were trading up by 0.45% versus the closing value of 9,145.8 for the index, whereas the futures for Hong Kong’s Hang Seng Index had risen by 0.3% versus the closing value of 25852.92
