The major U.S. stock index futures are indicating a positive opening on Wednesday, suggesting that the market may continue the upward momentum observed in the prior session.
Investor enthusiasm is largely fueled by robust earnings reports from notable companies, including Netflix, Procter & Gamble, and Travelers. Netflix shares are experiencing a remarkable surge of 14.6% in pre-market trading following impressive fourth-quarter results that surpassed analysts' expectations on both revenue and earnings. The company also announced a price increase concurrent with a rise in subscriber numbers during the quarter.
Procter & Gamble has shown significant pre-market strength, buoyed by fiscal second-quarter results that outperformed predictions. Similarly, Travelers' stock is up by 5.8% in pre-market activity after reporting fourth-quarter earnings that exceeded forecasts.
Conversely, shares of Johnson & Johnson may face downward pressure, as the company reported fourth-quarter results that, while better than expected, were overshadowed by a disappointing sales outlook for 2025.
On Tuesday, the U.S. stock market maintained an upward trajectory throughout the day, supported by declining bond yields and optimism regarding potential interest rate cuts this year. This positive sentiment contributed to strong market performances, with the Dow Jones Industrial Average closing up 537.98 points or 1.2% at 44,025.81. The S&P 500 rose by 52.58 points or 0.9% to 6,049.24, and the Nasdaq climbed 126.58 points or 0.6% to 19,756.78.
Investor confidence was further bolstered by a temporary easing of tariff concerns, as President Donald Trump, soon after his inauguration as the 47th President of the United States, avoided signaling new trade barriers against China. Although he talked about imposing tariffs on Mexico and Canada, no immediate policy action was taken.
Oracle's share price jumped nearly 7.5% amid expectations that President Trump will announce significant private sector investments, potentially up to $500 billion, to advance artificial intelligence infrastructure.
Charles Schwab's stock rose almost 6% on the back of strong earnings reports. Meanwhile, 3M experienced a marked increase due to better-than-expected quarterly earnings.
Several other major companies, including General Motors, Moderna, Dollar General, Micron Technology, Southwest Airlines, Alaska Air, Delta Airlines, Caterpillar, Nike, Starbucks, and United Airlines Holdings saw gains ranging from 3 to 5%.
Notable gainers during the session included Nvidia, Boeing, Amazon, Target, Eli Lilly, U.S. Bancorp, American Express, and Netflix.
In contrast, Walgreens Boots Alliance shares plunged almost 10%, negatively impacted by a Department of Justice lawsuit. This legal challenge follows a significant settlement over opioid prescriptions two years prior and alleges the company dispensed "millions of unlawful prescriptions."
Apple Inc. faced sharp declines amid a series of downgrades linked to underwhelming iPhone sales and less-than-satisfactory performance in its hardware and services divisions.
Other significant losers included Chevron, Merck, Lennar, and Booking Holdings.
In the commodities and currency markets, crude oil futures are experiencing a slight decline, falling $0.16 to $75.67 a barrel following a $1.56 drop to $75.83 a barrel on Tuesday. Gold prices continue to rise modestly, with an ounce trading at $2,763.50, an increase of $4.30 from the previous session's close. On the currency front, the U.S. dollar is trading at 155.92 yen, slightly below Tuesday's close of 156.30 yen, while it remains stable against the euro at $1.0428.
In Asia, stock markets presented a mixed performance on Wednesday. Chinese and Hong Kong stocks experienced notable declines following President Trump's renewed tariff threats targeting the EU and China. These measures are intended to address trade imbalances and combat fentanyl trafficking.
In remarks made at the White House, President Trump reiterated the administration's intent to impose a 10% tariff on goods imported from China starting February 1. This initiative is part of efforts to stem the flow of fentanyl, a deadly drug reportedly being trafficked from China to the United States via Mexico and Canada.
European markets are prepared to respond proportionately to any U.S. tariffs, according to the European Union's economy commissioner, following Trump's threats against imports from the EU.
In Asian trading, the dollar maintained its position amid uncertainties surrounding Trump's tariff policies. Gold remained around two-month highs above $2,750 per ounce, while oil prices continued to fall amidst concerns about increased U.S. production in an already anticipated oversupplied market.
China's Shanghai Composite Index declined by 0.9%, closing at 3,213.62, amid signs of escalating tensions between the world’s largest economies.In a recent turn of events, Hong Kong's Hang Seng Index fell sharply by 1.6% to settle at 19,778.77, breaking a six-day streak of gains. The decline was mainly driven by widespread losses in the technology sector, coinciding with former President Trump's announcement of a significant private-sector initiative focused on surpassing China in the field of artificial intelligence.
In contrast, Japanese markets experienced an upswing following Trump's news regarding a substantial $500 billion AI infrastructure project. This initiative involves collaboration with major players like SoftBank, Oracle, and OpenAI. Consequently, the Nikkei 225 Index rose by 1.6% to 39,646.25, while the broader Topix Index climbed by 0.9% to 2,737.19. Notably, SoftBank Group Corp shares witnessed a notable surge of 10.6%, accompanied by a 4% increase in Advantest and a 1.7% rise in Tokyo Electron's stock.
The Japanese yen weakened, retreating from a five-week peak reached earlier, due to media reports indicating that the Bank of Japan is likely to proceed with an interest rate hike on Friday.
In South Korea, stock markets reached their highest levels in over two months, buoyed by a positive outlook for the region's tech sector. Samsung Electronics advanced by 1.5%, while SK Hynix saw a significant increase of 3.4%, leading to a 1.2% rise in the Kospi, closing at 2,547.06.
Australian markets managed modest gains, marking a third consecutive session of advances, largely driven by technology and uranium stocks. The benchmark S&P/ASX 200 Index increased by 0.3% to 8,429.80, with the broader All Ordinaries Index following suit, also up by 0.3% to 8,680.50.
Meanwhile, New Zealand saw a slight decline, with the S&P/NZX-50 Index slipping by 0.1% to 13,037.14. This movement followed data indicating that annual inflation remained above the central bank's target midpoint in the final quarter of the previous year.
**Europe**
European stock markets largely trended upwards on Wednesday despite ex-President Trump's reiteration of his intention to impose tariffs on EU imports to the U.S. Valdis Dombrovskis, the European Union's commissioner for the economy, addressed this threat, stating in a CNBC interview at the World Economic Forum in Davos that the EU would respond proportionately to defend its economic interests if necessary.
Optimism surrounding potential rate cuts bolstered sentiment following remarks from ECB policymaker Klaas Knot, who supported the prospect of imminent rate reductions. Speaking with Bloomberg TV’s Francine Lacqua in Davos, the Dutch central banker suggested the market's expectations for rate cuts in January and March were plausible, though he cautioned that predictions beyond these timeframes are fraught with uncertainty due to global economic instability.
The European Central Bank is widely anticipated to lower interest rates by 25 basis points next week to bolster regional economic growth.
On the market front, the U.K.'s FTSE 100 Index rose by 0.2%, while France's CAC 40 Index and Germany's DAX Index saw gains of 1.1% and 1.3% respectively. Adidas shares soared by 6.5% following the release of stronger-than-anticipated fourth-quarter figures. In contrast, easyJet's stock dropped nearly 3% after the budget airline reported a reduced operating loss for the first quarter.
German automotive supplier Schaeffler experienced a significant downturn, plunging 13%, as it alerted investors that its annual profits did not meet its previous guidance or market expectations. Barry Callebaut, renowned for chocolate production and cocoa processing, saw its shares lose 5% after scaling back its projected sales volume.
On the economic data side, the U.K. government reported a more than doubling of the budget deficit in December compared to the previous year, driven by spending increases that outpaced rises in revenue. Public sector net borrowing climbed by GBP 10.1 billion year-on-year to reach GBP 17.8 billion in December, marking the highest December borrowing figure in four years and exceeding the GBP 14.6 billion estimate from the Office for Budget Responsibility.
**U.S. Economic News**
Today, the Conference Board is set to publish its December report on leading economic indicators at 10 a.m. ET. The leading economic index is predicted to decrease slightly by 0.1% in December, following a 0.3% increase in November. Furthermore, at 1 p.m. ET, the Treasury Department is scheduled to reveal the results of its $13 billion auction of twenty-year bonds.
