U.S. stock futures edged slightly higher Wednesday as investors braced for a series of significant events, including the Federal Reserve’s upcoming interest rate announcement, key economic reports, and earnings releases from leading tech giants. The Fed is widely expected to hold rates steady despite growing pressure from President Donald Trump to lower borrowing costs swiftly. Meanwhile, investors are keenly watching earnings reports from two “Magnificent Seven” tech leaders, Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT), with particular attention on their AI development plans.
Futures show mild gains
By early Wednesday, Dow futures held steady, S&P 500 futures gained about 0.1%, and Nasdaq 100 futures were up approximately 0.2%. This came after the major indexes dipped on Tuesday, with the S&P 500 and Nasdaq Composite retreating from record highs.
Several Dow components, including Merck (NYSE:MRK), UnitedHealth (NYSE:UNH), and Boeing (NYSE:BA), declined following their earnings reports. United Parcel Service (NYSE:UPS) notably dropped over 10% after once again withholding annual revenue and margin forecasts, fueling concerns about the impact of volatile U.S. trade policies on its performance.
Consumer goods company Procter & Gamble (NYSE:PG) slid after issuing lower-than-expected annual guidance, also warning of imminent price increases on select products to offset tariff effects. Appliance manufacturer Whirlpool (NYSE:WHR) cut its full-year outlook, sending shares down more than 13%, attributing some of the pressure to tariffs.
Trade talks yield limited progress
A new round of trade discussions between the U.S. and China in Sweden ended without any major breakthroughs after two days of talks. Still, both parties described the exchanges as constructive efforts to extend the current 90-day trade truce.
U.S. Treasury Secretary Scott Bessent noted after the meetings, “It’s just that we haven’t given the signoff.” Officials indicated that President Trump will ultimately decide whether to extend the truce, which expires on August 12. Without an extension, U.S. tariffs on China could jump back to triple-digit levels.
Trade negotiations have remained a central focus of the Trump administration, highlighted by a recent framework agreement with the European Union. On Tuesday, Trump stated that a deal with India was still pending, after Reuters reported India is preparing to accept tariffs between 20% and 25% on exports to the U.S.
Despite some agreements, many trade deals remain unresolved, with the August 1 deadline for Trump’s elevated “reciprocal” tariffs fast approaching.
Fed decision takes center stage
Attention now turns to the Federal Reserve, expected to keep interest rates unchanged at the end of its two-day meeting on Wednesday. Several Fed officials have suggested a more cautious stance on future rate changes, citing the need to assess the effects of Trump’s aggressive tariff policies on the broader economy.
Concerns persist that tariffs may drive inflation higher and hamper growth. So far, price increases have been modest, and economic activity remains relatively resilient, though there is apprehension that businesses will pass rising costs on to consumers.
The Fed has maintained borrowing costs between 4.25% and 4.5%, a policy defended publicly by Chair Jerome Powell but criticized by Trump, who has urged a swift rate cut to stimulate growth.
Economic data in focus
This week brings a stream of economic reports offering insights into the U.S. economy. On Wednesday, markets will digest the first estimate of second-quarter GDP, expected to show growth of 2.5% after a 0.5% contraction in Q1.
July’s private payrolls are projected to increase by 77,000 following a 33,000 decline in June, with ADP data serving as a lead indicator ahead of Friday’s crucial nonfarm payrolls report.
Investors have also noted rising consumer confidence this month, though job openings and hiring figures have decreased, hinting at some labor market cooling.
Tech earnings spotlight on Microsoft and Meta
Wednesday’s earnings calendar is highlighted by results from key members of the “Magnificent Seven” tech group.
Microsoft’s AI initiatives will receive close scrutiny, especially since partner OpenAI has recently relied on cloud services from competitors such as Google (NASDAQ:GOOGL), CoreWeave (NASDAQ:CRWV), and Oracle (NYSE:ORCL). OpenAI’s success has fueled growth in Microsoft’s Azure cloud business, making the company a major beneficiary of the AI boom.
Artificial intelligence will also be a key theme in Meta Platforms’ earnings. CEO Mark Zuckerberg has made massive AI investments a cornerstone of the company’s strategy, aiming to spend around $55 billion on new AI data centers over the last three quarters of 2025. How Meta plans to monetize these investments remains a critical focus for investors.
In addition to Microsoft and Meta, other earnings releases expected after the bell include chip designer Arm Holdings (NASDAQ:ARM) and trading platform Robinhood Markets (NASDAQ:HOOD).
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