US equity futures traded modestly higher on Wednesday as investors balanced signs of diplomatic progress in the Middle East against a fresh round of high-profile corporate earnings. Reports from SpaceX (NASDAQ:SPCX), Advanced Micro Devices (NASDAQ:AMD) and Novo Nordisk (NYSE:NVO) dominated pre-market trading.
While hopes of easing geopolitical tensions supported broader sentiment, several individual stocks experienced sharp moves following earnings announcements and executive commentary.
Markets gain on hopes of a breakthrough over the Strait of Hormuz
At 03:09 ET (07:09 GMT), futures on the Dow Jones Industrial Average rose 156 points, or 0.3%. S&P 500 futures added 0.4%, while Nasdaq 100 futures advanced 0.3%.
Wall Street ended the previous session in positive territory after US Treasury Secretary Scott Bessent indicated that negotiations with Iran over reopening the Strait of Hormuz could soon produce an agreement. Officials in Qatar also pointed to encouraging progress in regional talks.
Lower crude prices added further support by reducing concerns that energy costs could reignite inflationary pressures or force central banks to maintain higher interest rates for longer. Treasury yields also moved lower before comments from Kansas City Federal Reserve President Jeffrey Schmid, who said inflation would require “tighter policy” before returning to the Fed’s 2% target.
Corporate earnings continued to underpin investor confidence. Palantir (NASDAQ:PLTR) surged almost 30% after lifting its annual revenue forecast, with Chief Executive Alex Karp describing quarterly sales growth as “otherworldly.” Snap (NYSE:SNAP) also rallied after narrowing its quarterly loss, while Caterpillar (NYSE:CAT) climbed more than 5% after raising its sales outlook for 2026.
According to Deutsche Bank, investors also continued rotating back into semiconductor and AI infrastructure stocks, becoming “increasingly willing to lean back into the capex theme that looked under pressure” during July’s market volatility.
Trump says negotiations with Iran are progressing
US President Donald Trump said talks between Washington and Tehran had been “very good,” fuelling speculation that a resolution to months of tensions in the Gulf may be approaching.
Speaking with Fox News, Trump said the Strait of Hormuz would be “open very soon” and warned that Iran would “get hit really hard” if it abandoned a potential agreement.
Despite the encouraging rhetoric, analysts cautioned that investors remain wary after several previous rounds of negotiations failed to deliver lasting results.
“Markets have seen plenty of false dawns throughout this conflict, so plenty of attention will be on whether a deal is announced imminently and its details,” Deutsche Bank analysts said.
Brent crude later recovered to trade around 0.8% higher at $80.01 per barrel after falling below the $80 mark in the previous session.
Heavy investment overshadows strong SpaceX revenue growth
SpaceX shares fell more than 7% in extended trading despite reporting a sharp increase in quarterly revenue.
The aerospace and satellite communications company generated second-quarter revenue of $7.8 billion, up 92% year-on-year, while narrowing its net loss. However, investors focused on the company’s heavy investment programme, which pushed free cash flow further into negative territory.
Capital expenditure reached $18.36 billion during the quarter, including $15.8 billion invested in the company’s artificial intelligence operations. Meanwhile, revenue from Starlink increased 66% to $4.3 billion as subscriber numbers doubled.
Chief Executive Elon Musk reiterated his long-term ambitions, saying the company ultimately aims to generate $1 trillion in annual revenue and suggesting orbital data centres could become a reality next year.
“[T]he revenue and EBITDA results are great, but the cash flow numbers are pretty ugly,” analysts at Vital Knowledge said.
Musk comments weigh on AMD despite record performance
Advanced Micro Devices shares also moved lower after Musk announced that SpaceX would rely exclusively on Nvidia’s Blackwell AI platform rather than purchasing AMD processors.
He described Nvidia as offering the “best architecture” and confirmed that SpaceX would “build exclusively” using its technology.
The announcement overshadowed another record quarter for AMD.
The semiconductor manufacturer reported revenue of $11.5 billion for the quarter ended 27 June, slightly exceeding analyst expectations and marking its fifth consecutive quarter of record sales.
Revenue from AMD’s data centre division climbed to a record $6.7 billion, accounting for 58% of total company revenue compared with 42% a year earlier, underscoring continued growth in AI infrastructure demand.
Novo Nordisk disappoints despite improving guidance
Novo Nordisk (NYSE:NVO) raised its full-year outlook, forecasting a smaller decline in sales and operating profit than previously expected as demand for its obesity treatments remained resilient.
However, the company’s shares declined after sales of the oral version of Wegovy came in below market forecasts and an experimental next-generation weight-loss treatment delivered disappointing clinical trial data.
Novo Nordisk now expects adjusted sales and operating profit to decline by up to 6% at constant exchange rates, improving on its earlier guidance for declines of between 4% and 12%.
Second-quarter sales of oral Wegovy totalled 3.2 billion Danish kroner, missing analyst estimates of 3.3 billion kroner, while injectable Wegovy generated revenue of 19.48 billion kroner.
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