U.S. stock futures were subdued on Wednesday as markets recovered from the previous session’s semiconductor-led decline and investors prepared for the release of minutes from the Federal Reserve’s July policy meeting.
At 03:11 ET (07:11 GMT), Dow futures advanced 42 points, or 0.1%, while S&P 500 futures were little changed. Nasdaq 100 futures declined 40 points, or 0.1%.
Wall Street closed lower on Tuesday as weakness in semiconductor stocks combined with rising government bond yields to weigh on sentiment. Vital Knowledge analysts linked the chip-sector retreat to profit-taking and concerns about a “tidal wave” of debt issuance associated with the artificial intelligence investment cycle.
Heavy spending on AI infrastructure remains under scrutiny, particularly the enormous capital required to develop advanced data centres. Questions over whether current investment levels can generate sufficient returns have become an increasingly important issue for technology investors.
Deutsche Bank analysts said concerns surrounding fiscal deficits, higher oil prices and the continuing Iran conflict also contributed to the rise in global bond yields. Treasury yields subsequently retreated after weaker U.S. housing and industrial production figures reduced expectations for rapid monetary tightening.
July Fed Minutes Could Clarify Policy Debate
Recent softer employment data and relatively contained inflation figures have reduced market expectations for a Federal Reserve rate increase in the coming months.
Investors will therefore closely examine the minutes from the Fed’s July meeting, when policymakers voted to leave interest rates unchanged.
Fed Chair Kevin Warsh provided little indication of what could come next, saying the central bank will “not waver” in its commitment to returning inflation to the 2% target.
The minutes could provide greater detail about divisions within the Federal Open Market Committee. Warsh characterised the meeting as a “good family fight,” with three policymakers opposing the decision to keep rates unchanged and instead favouring a 25-basis-point increase.
Markets will be looking for evidence of how officials are balancing inflation risks against signs of cooling in parts of the U.S. economy.
Target, Lowe’s and Analog Devices Prepare to Report
Corporate earnings are another major focus, particularly results from retailers that could provide fresh information about consumer spending.
Target (NYSE:TGT) is due to report before the opening bell. The retailer raised its annual sales growth forecast in May for the first time in two years despite acknowledging continued macroeconomic uncertainty.
Chief Executive Michael Fiddelke previously welcomed the company’s 5.6% first-quarter sales increase but cautioned that he would not “confuse this progress with potential.”
Lowe’s (NYSE:LOW) will also release quarterly numbers after rival Home Depot (NYSE:HD) delivered better-than-expected second-quarter sales and profit. Demand for repair and maintenance products helped Home Depot offset weaker spending on major renovation projects.
Semiconductor manufacturer Analog Devices (NASDAQ:ADI) is also scheduled to report. Its previous third-quarter revenue outlook exceeded expectations as growing AI infrastructure investment supported demand for semiconductor and sensor products.
U.S. Delays 50% Canadian Tariffs
Trade tensions eased slightly after President Donald Trump announced a three-day suspension of planned 50% tariffs on selected Canadian imports.
The postponement was announced only hours before the tariffs were scheduled to begin, giving the U.S. and Canada additional time to complete negotiations.
Trump said the two countries have a “deal,” pending “the finalization of documents.”
The proposed tariffs would affect approximately $20 billion of Canadian goods, including furniture, wine, fishing rods and hockey sticks.
The Office of the U.S. Trade Representative said the emerging agreement would provide greater Canadian market access for U.S. products and include “alignment” on digital trade.
Canadian Prime Minister Mark Carney said negotiations had progressed but warned that “important work” remained. He also reiterated his ambition to make Canada’s economy “more independent” and “competitive”.
OpenAI and Anthropic Results Highlight Intensifying AI Competition
Artificial intelligence companies are also in focus following a Wall Street Journal report on the financial performance of OpenAI (NASDAQ:OAI) and Anthropic (NASDAQ:ANTP).
OpenAI reportedly generated second-quarter revenue of $6.7 billion, an increase of 18% from $5.7 billion during the first quarter, although its losses widened.
Anthropic reportedly delivered significantly faster growth, more than doubling quarterly revenue to $11.6 billion while recording a small operating profit.
The figures could point to shifting competitive momentum within the AI industry. Slower growth for ChatGPT and increased developer adoption of Anthropic’s Claude Code are adding pressure on OpenAI to strengthen its growth trajectory as competition across generative AI intensifies.
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